Source
r/personalfinance•
dop0987

Student Loans with Bankrupt Parents

My parents declared bankruptcy a few years back, and still have a few years left on it. I got federal loans through them (Federal Plus) and through me (Stafford), but that doesn't cover my total cost. I'm still short around $7,100.

I have been trying to fill out private loans (applied for roughly 6) but keep getting denied with my parents as a cosigner. I also tried applying alone, still get denied.

My question is, how do I get the loans to cover this year? I realize I'm probably going to have to ask somebody to cosign with me (relative), but I feel so bad throwing that burden on them. Any ideas from r/personalfinance?

Posted Aug 12, 2011, 4:17 PM UTC

56
[deleted]•

Go to a cheaper school. Public universities are ~12k a year. Community colleges are <6k a year.

If you are just short living expenses, get a job, move in with parents.

Otherwise you are SOL. Private loans are a rip off anyways.

I would never ask a relative, even my own grandparents to co-sign a loan. That's asking way too much in my opinion. I didn't even ask my parents, I just took the federal loans and wrote a check for the rest.

Edit: Get pregnant, turn 25, get married, join the army, be an emancipated minor. Those are your other options.

4
ohnodapopo•

Go to a cheaper school.

I know you're trying to help, but OP is clearly looking for a way to stay at his current school. Other than that your advice is spot on.

That being said, I was in the same boat as OP -- both parents incapable of cosigning so all my loans were solo. Granted I graduated a few years ago in the age of easy credit. I suggest that you keep applying, talk to the finaid office and see if they can recommend any private loans, and get a work study job.

1
[deleted]•

I know you're trying to help, but OP is clearly looking for a way to stay at his current school. Other than that your advice is spot on.

I'm aware, I also believe that it's valid advice. Unless his parents are making 150k+ a year, OP should get enough money in federal loans to cover most of the tuition at the local public university. If his parents make 150k, I would hope they can lend OP 12k a year.

Just blindly guessing, I'm sure the school is 20k+ a year, and since OP is short 7k, they probably aren't getting many grants or scholarships, which leaves the question of "Does OP really need to be 80k in debt at the end of college?" I would say the answer is "hell no." That's almost 1000 dollars a month in payments for 10 years.

1
spince•

Does the $7,100 short cover living expenses, or is that tuition and other fees that, if not paid, would prevent you from going to school? If its just living expenses, get a job and work your ass off during school to try to cover as much as possible, also possibly ask your relatives for a loan while you're working.

I'm probably going to have to ask somebody to cosign with me (relative)

This is probably going to be your only option otherwise.

Normally if your school accepted credit cards, one option would have been to get a 0% apr card for a year and pay it with that (although that's dangerous waters for other reasons). But if you're already having trouble getting a loan I don't see that being possible either.

2
shake1dde•

Just make sure to pay those monthly minimums or the rate will automatically jump to something crazy. Read all the fine print before doing something risky like financing with a credit card.

1
[deleted]•

[deleted]

1
mrsjoshhomme•

Have you been in contact with the financial aid office at your university? They should have some sort of special circumstance appeal process, or a repository of scholarships that you are eligible/can apply for. No matter what happens, you are going to have to work twice as hard to find funding for the rest of your education. Your situation sucks, and I'm really sorry that you are in this position. Before you start down this road, look into what resources the university has to help you.

1