I graduated from high school with honors in June and have been accepted
to a prestigious private college, where I will be majoring in computer
science and math. The college awarded me $31,000 in grants and
scholarships, but I still need to come up with $20,000. I applied for
a student loan with each of my parents and was declined, both times,
because of my parent's bad credit history. I am still 17 years old and
have not held a paying job. (I cared for my special needs sister
while both of my parents worked.) My mom is no longer working and
stays home with my sister full-time and does on-line schooling. My dad
is now working two full time jobs. According to the FAFSA they are
"supposed" to be able to pay $7,000 per year towards my education, but
I know they do not have it. Am I eligible for the full $20,000 per
year or will they take off the $7,000 they think my parents can pay?
I have asked an uncle to cosign the loan application for just this
year, but he already put 3 kids through college and is financially
strapped. I've worked hard to get this far and have enough AP credits
from high school for almost a complete college year.
You applied for a private student loan with your parents as cosigners
and were denied because of your parents' credit history. Your own
credit history is too thin for you to qualify for a private student
loan on your own.
You should always borrow federal first, because federal education
loans are cheaper, more available and have better repayment terms. For
example, the federal Stafford loan does not depend on your credit
history or your parents' credit history. You can borrow up to $5,500
from the Stafford loan program as a college freshman. If your parents
apply for the Parent PLUS loan and are denied, you will be able to
borrow an additional $4,000 in unsubsidized Stafford loans, bringing
the freshman year total to $9,500.
The $7,000 expected family contribution is not subtracted from the
loan limits. The unsubsidized Stafford loan and the Parent PLUS loan
are intended to help you pay for the family portion of college costs.
You can appeal for more financial aid by asking the college financial
aid administrator for a professional judgment review, sometimes called
a special circumstances review. Tell the financial aid administrator
about any unusual family financial circumstances, such as anything
that sets you apart from the typical family or anything that has
changed. Having a special needs child is a good example, as is a
parent losing his or her job. Provide the college with a copy of
documentation of the special circumstances, such as copies of bills
associated with your sister's special needs and a copy of your
mother's layoff notice or proof that she is collecting unemployment
benefits. Even if your mother quit her job voluntarily, the college
financial aid administrator can take the reduction in family income
into account. It is entirely up to the college whether the unusual
circumstances merit an adjustment, but sometimes an appeal for more
financial aid will result in an improved financial aid package.
But a successful appeal may not yield a lot of additional gift aid at
this college. After all, the college left you with a self-help level
of $20,000 even though your EFC is $7,000, meaning that the college is
gapping you with $13,000 in unmet need.