Will you be able to get a loan?

Parents Forum
1

<p>I am guessing the parent forum gets the most traffic so I thought I would pose the question here. </p>

<p>In the upcoming weeks your family will be deciding which college your student will attend. Parents will be finding out how much money they will actually have to have in hand in July/August to pay the school that they choose. Many parents will rely on loans.</p>

<p>As many people know the ecomony is having difficulty (understatement). Banks have less money to lend and are tightening their standards of who they lend it to. They are also deciding how much interest they will charge you.</p>

<p>Please, please go to your lenders now and find out where you stand on getting a loan. Even if you think you are in great shape financially go and talk to your lenders. </p>

<p>Know how much you can do before your student makes a decision. The economy is changing even as we speak and what may have seemed feasible in Sept. may not be feasible now.</p>

<p>Just a heads up if you have been working too hard and not following the economic news.</p>

2

<p>I thought the loan was given to the students with parents cosigning it. So, is the parents credit standing taken into account then?</p>

3

<p>SAX, Good of you to bring up this topic. THE Elephant and Rhino have entered the room. </p>

<p>Guaranteed FEFL are essentially No Doc loans, I have wondered how long will the guarantors will continue taking the risk of no documentation for enormous loans. </p>

<p>Azn Dood: Supplemental loans that require a parental loan will probably be harder to get and at an higher price. And yes, credit standing is taken into account for PLUS and supplemental loans.</p>

4

<p>If the parent is turned down, then the student automatically can get an extra $4K a year from the feds (that may have gone up). </p>

<p>It’s also time to tell the kids that they are very unlikely to get any loan that is not through their school, the state, or the feds, without a credit-worthy co-signer. Credit-worthiness is changing rapidly. </p>

<p>And, finally - it will soon be that silly season, where kids start posting “My parents won’t/can’t pay what they are asking so I’ll just pay for Harvard myself with loans in my name.” Magical thinking doesn’t produce $100k of student loans. Apart from what I set out above- No credit. No collateral. No loan.</p>