HellBill » Hell Bill Area: » Bill Payment » Taking Out College Loans?

  #1 ()
: So I'm leaving for college in about less than a year (May 2015). Yes I know it's a good while from now but I need advice on some things. I live in Louisiana but I will be moving to LA for college, for 3 years. But I actually want to stay after school so I don't come back home. The school I'm going to does have dorms but they suggest us getting apartments and have a list for us to choose from. The cost is about $900-$1,100 a month. My mom has money but not enough to take care of herself here and support me in LA. I was trying to do scholarships but that did NOT work out. It's just so hard and I don't want to depend on them and in the end get my hopes up. So I wanted to do loans. My college tuition is right at a total of $43k. So I know I will need loans regardless. I was thinking about doing a loan for about $75k-$80 to help pay for school and pay my apartment rent up a year or so. Then give the rest back. I know it sounds like much, something I probably won't be able to pay off any time soon. But who cares? I'm going to film school and a lot of producers and actors had to take a leap of faith so here I am too. So I wanted to know around how much you guys think I should get? Do you think I would get approved for that much? And I was wondering when should I actually start calling apartments in LA to ask if they will be available of May. Yes it is a big move. Can I just get a little advice on it all? Please no rude comments or calling me dumb. I know I'm dumb /)_(\. Thanks :)
So there is no way I could add in private loans to the mix? My grandmother has A+ credit and has a high income. I'm honestly not sure on what all to do. I'm so confused and lost. I'm just going to have to talk to someone at the school on what to do.
Okay I'm pretty confused. I was told I could get as much as I need for college loans. How the hell do I afford college?!?!

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  #2 ()
: This is probably not a realistic plan for several reasons:

Every school has a Cost of Attendance budget that includes the school's direct charges, such as tuition and fees, but also your indirect costs, such as books, transportation and living expenses, including off-campus expenses. A student can only borrow up to the amount of this COA. All student loans go to the school first, where the college's direct charges are deducted. If there is any money left over after those charges are paid, it is refunded back to the student to pay for indirect costs. So, theoretically, you can pay for off campus housing with a student loan, but the catch is that, in most cases, the amount left over won't be enough to cover the entire rent and other expenses.

You can expect to receive $5,500 in your own name from federal student loans. Beyond that, your mother could apply for a parent PLUS loan. If she is approved, she can take a loan for any amount up to the COA. If she is denied, then you can receive an additional $4,000 in your name.

If your mother is denied for the PLUS, or she does not want to accept one, then your next option is private student loans which are not a good idea because they have very high interest rates (typically 10 -12%) These are credit based, and it is very unlikely that you could receive one without a co-signer who has sufficient income and a low enough debt to income ratio to qualify. The loan amount you are talking about is very high, so your co-signer needs to have pretty high income and stellar credit to get approved for that much. And, of course, you'd still be limited to the amount of the COA.

Assuming your mother or grandmother are willing and able to do this for you, there's the question of whether they should. Both are at a time in their lives when they are either near retirement, or already there. These ladies need to be concerned about how they are going to support themselves when they are no longer working. They should not risk taking on large amounts of debt to pay for an education that you have a lifetime to pay for.

While you may have the best of intentions, if you are not able to repay these loans, the co-signer will be on the hook for the payments, which could be disastrous for a retired person like your grandmother who is probably on a fixed income, or a person like your mom who should be putting every penny she can into a retirement plan of her own. Lots of students have dreams of making it big in the film industry in LA, but the reality is that the vast majority of them won't make it, or will only see modest success after years of low wage jobs. The image of the starving actor or filmmaker waiting tables while waiting for his big break is almost a cliché. If you are not able to make the payments on these loans, your co-signer will become responsible for them. Do you really want to risk putting your mother or grandmother into financial ruin at their ages, when they have no time to recover from it?

Keep in mind that college takes more than just one year, so just to get a bachelor's degree with your plan, you're talking about borrowing $320,000. The average student loan costs about $11.50 per month, so if you were able to borrow that much, you would be looking at monthly payments of $3680 for at least 10 years. How likely is it that you will be able to afford those payments?

Who cares? You will, when they dismiss you from the school because you can't pay the bill, and you're stuck paying back student loans with nothing to show for it. You will, when your landlord evicts you and they shut off your lights. You will, when you have to support your mother in her old age because she didn't save for it while she was paying off your student loans. And you will, when your credit is wrecked and you can't rent an apartment, get a job, buy a car, qualify for a credit card, or do any of the things that you hope your future will include.

It's always hard for a student to realize that he might not be able to afford his dreams, but that's a hard reality for many. Facing it now can save you a nightmare of debt later on. Does this mean that you can't achieve your dreams? No. But it may mean that this particular route isn't the way that you will do it. It may mean that you choose a different school that is more within your budget. Do you want to be in LA? Sure. Do you NEED to be in LA? No--many of the most successful actors and filmmakers got their start elsewhere. If you truly have the talent, you'll make it no matter where you start.

Taking a leap of faith is fine, but when you leap off a cliff, you're much more likely to break your neck than fly. Leap if you must, but do it with your eyes wide open. Make sure you do the research and do the math, so you know what you're jumping into.
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  #3 ()
: There is absolutely NO way you can take out that much for one year, even with a co signer. You need a reality check. You cannot take out almost more than half your CoA, especially for an undergrad degree. No idea where you heard you can take out s much s you needed because that is entirely false. Find a school you can afford.
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  #4 ()
: no, as a depependent student the maximum amount of federal loans you can get as a freshman is $5,500 for the academic year

most likely that is already figured in as part of your student loan package

no way are you going to qualify for a private student loan without a creditworthy cosigner who has a high income & very low debt-to-income ratio

in addition... your total aid package can not exceed the published COA as listed by the school

you need to find a job out there before you even leave -- and you need to plan to work full-time while in school full-time
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