Help re: student loans for adult student w/marred credit

Paying for College
1

<p>I am helping a married student who has a Bachelors and is going back to complete a teaching credential. The wife lost her job and the couple sold their house in a short sale within the last year, so that shows on their credit.</p>

<p>If the EFC is too high, how would Grad Plus loans work in this situation? Do they check credit for Grad Plus?</p>

<p>This is the info I have been given:</p>

<p>Estimated Cost is $23,500
EFC is $32,000</p>

<p>Both worked FT last year, she lost her job and is doing the credential, so they filed a change of income, no updated EFC yet.</p>

<p>We received $3,600 for the year from the Stafford Unsubsidized Loan “Direct Loan 2.”
Fees are $2,833 per term, depending the first year may be up to 3 terms. So the first year Fees will be between $5,666 and $8,499. I would like to try and either get a private or an unsubsidized loan to cover the potential $5,000 difference.</p>

<p>The biggest question is what credit category does a short sale fall under (adverse credit history defined in regulations as being 90 days or more delinquent on any debt, or having a credit report that shows default, discharge, foreclosure, repossession, tax lien, wage garnishment or write-off of a Title IV debt during the five years preceding the date of the credit report). </p>

<p>The first private loan applied for said wife got approved but didn’t make enough, and husband failed for a cosigner due to the short sale. So, it seems that the short sale didn’t show up on her credit check some how, The Grad Plus loan didn’t ask how much she was going to make this year so maybe we have a shot.</p>

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<p>The problem here is going to be in how this student is classified. If the student is considered to be in a grad program, the PLUS in this case could only be certified for $1500 … grad annual max is $20,500 (of which up to 8500 can be sub, although this student’s loan would be all unsub due to EFC). If the PLUS is denied based on credit report, the student could get a cosigner, get on a payment plan, or borrow some other way. </p>

<p>If the student is put into a post bachelor certification status by the school, this student is in a bad way. Only undergrad loans are available, and the amount is determined by the type of program the student. The max the student will get in student loans would then be (at most - the amount is determined by the program the student is in - the aid office has to review a plan of work from the student to do this) $12,500 - often just for a period of one calendar year. After this time, the student’s eligibility for student loans is gone for that particular program. NO grad PLUS for a post bach status student. </p>

<p>It is really important for this student to know what program & what type of financial aid is available for the particular program. Check with the school.</p>

<p>OOPS … I forgot to mention that student can get a TEACH grant ($4000/year) without demonstrated need — BUT there are strings attached after graduation: <a href=“https://teach-ats.ed.gov/ats/images/gen/factsheet.pdf[/url]”>https://teach-ats.ed.gov/ats/images/gen/factsheet.pdf&lt;/a&gt;. She could possibly get that plus the annual loan limits up to COA.</p>

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<p>Thanks, Kelsmom, I know I could depend on you!</p>

<p>SO, do PLUS loans always require good credit? And for an UG if their parent does not qualify for a PLUS, they are then eligible for another loan, does that apply to grad students?</p>

<p>I have asked the student for clarification</p>

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<p>No, a denial on the Graduate PLUS loan will not increase the amount of the Stafford Graduate Loan.</p>