Well there are two or three different ways of looking at it, depending on where he goes and what they want to do.
If he gets the loan, he is going to be paying interest on the funds all at once. He can write them off, but thats a different deal. The Federal Stafford loan, and others, can be subsidized depending on the situation where the funds are interest free as long as your kid is going to college. These loans aren’t credit contingent and are in the kids name, though.
But here is another idea, take out the equity loan and have your kid take out the federal student loans as well (in their name) and use the equity loan to pay off the student loans when the kid graduates, giving the kid some credit score.
A great place to look for outside the college scholarships, a great place to search is a professional association that governs the profession that your student is going to be in. For example, if the kid wants to be a psycologist, she might hit up the American Pyscological Association for example.
Shit, almost forgot again. If you fill out the FAFSA and use the option to estimate what your tax return is going to say because you don’t have your tax return done yet, its going to flag you for the paperwork to confirm your estimates. If you give it fugures, the FAFSA is routed through the IRS’s database to match. If you mess up filling it out and it doesn’t match what the IRS has for you, it can flag it for the paperwork as well.
The most common mistake made on FAFSAs are:
Application asks what the taxes paid for the year, and people put the amount of their return
People get the household information wrong. They put a grandparent or neice or nephew on the household information, but the application is really asking about the parent and the direct child, not others. If the others are completely supported by the parents, they need to down to the financial aid office and explain it to them if they are flagged for the paperwork.
Yeah, I know. Two item list… where is the third? Pbsh, whatev.
Our situation is a mess. Our son is a senior and scored 30 on his ACT. He has already been accepted to a university (wants to become a pharmacist). Very bright, good kid.
The problem is our personal finances, to put it mildly, suck. My wife has been on medical disability (first was long term, now SSI) for over 7 years. This cut her 6 figure income down to almost nothing. Medical debt is a mile high. Tied into that were my getting laid off a couple times, late payments to just about everything. Our credit score is so low that we couldn’t get money from a loan shark. There is no way we would be able to co-sign on a loan for him. We’ve already cashed in both of our 401(k)’s because we needed emergency money to take care of normal living.
We know he is going to have to ask one set of grandparents to co-sign. We just want to see if there is anything we can do to help him along. Are there any “hardship” loans or grants he could get? Any suggestions would be greatly appreciated.
Fairly unusual question, but perhaps you know the answer:
I’m 26 and thinking about law school. I have been self supporting since i finished college (21). Is my parents income still going to be relevant if I apply for financial aid?
Federal student loan programs such as Stafford aren’t going to be in your name, they are going to be in the kid’s name, and they aren’t credit contingent. Depending on where your son decides to go to school, grant funds and loans may cover the bill, but if he is going to a private college, they might not either. But if he can borrow enough to cover his tuition and fees through the finanancial aid office, your credit score won’t matter at all.
Oldest child is a college freshman. Second child is a high school senior. The family financial burden will go up when second child starts college. Is it correct to assume that this might result in additional need-based aid for both students?
If so, how to best fix this problem: common family last name has an apostrophe, as in O’Connnor. Oldest child’s FAFSA does not show the apostrophe and family recalls that the form did not allow them to enter it at the time. They used the apostrophe on second child’s form. They are worried that the two forms will not tie together back to the same family and that they may not get credit for second child’s added expense, especially on first child’s updated form. They have called FAFSA to address this and have been rather too quickly assured that there is no problem and that they do not need to correct oldest child’s FAFSA. Can they trust this advice? Any other thoughts?
The more dependents in the household, the lower the EFC tends to calculate out (the estimated family contribution) and the higher the eligiblity can be.
I wouldn’t worry about the apostrophe at all, because the application is just generating numbers for the school to read. Its very important that he confirms that the school has a copy of his FAFSA and have everything they need to process, but the apostrophe is no big deal. The FAFSA is going to treat him by his social and the first two letters of his last name, so he is still going to be 123456789OC01 (first FAFSA) or 123456789OC02 (second FAFSA for same year) etc…
