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Author: wrjohnston91283 Big red star, 1000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 881776  
Subject: Student Loans - My Rich Uncle Date: 10/3/2007 4:55 PM
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Does anyone have any experience with MyRichUncle for student lending?  I have a friend who is looking for student loans (non-federal at this point, although she should be speaking with her school's financial aid office next week).

She doesn't meet Citibanks no cosigner criteria (doesn't make enough money), and doesn't have a cosigner (this is set in stone).

MyRichUncle's website talks about how they cater to borrowers with little or no credit history, so on its face, and they do alternative credit scoring.

Thanks
WRJ
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Author: jeffbrig Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 782633 of 881776
Subject: Re: Student Loans - My Rich Uncle Date: 10/3/2007 7:01 PM
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She needs to start by filling out a FAFSA and talking to the school's financial aid office. The benefits of federally backed student loans are significant - in school deferrment, possibly subsidized interest while in school, possibilities for hardship deferment, income contingent payback, etc.

Only after completely exhausting that route would I consider any private lender.

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Author: LaughingRaven Big red star, 1000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 782634 of 881776
Subject: Re: Student Loans - My Rich Uncle Date: 10/3/2007 7:39 PM
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MyRichUncle's website talks about how they cater to borrowers with little or no credit history, so on its face, and they do alternative credit scoring.

Sounds to me like she'll pay dearly for that "alternative credit scoring."

--
Raven

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Author: wrjohnston91283 Big red star, 1000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 782635 of 881776
Subject: Re: Student Loans - My Rich Uncle Date: 10/3/2007 7:52 PM
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She needs to start by filling out a FAFSA and talking to the school's financial aid office. The benefits of federally backed student loans are significant - in school deferrment, possibly subsidized interest while in school, possibilities for hardship deferment, income contingent payback, etc.

Only after completely exhausting that route would I consider any private lender.


She filled out the FAFSA last week. The expected contribution was over $30K, and school costs $6K a year. She should be going to see the school next week.

Now, can she get any federal loans at all (of any type) with that type of situation, and no cosigner? She visited the financial aid office a few semesters ago and was told there was nothing they could do for her. I had her make an appointment this time and email them her background beforehand, hoping to get a better response.

I didn't have to deal with student loans, so originally I was under the impression that if your families expected contribution was greater than tuition, you couldn't get any federal aid (which is what she was originally told). Now I am reading differently, that she can get unsubsidized loans Stafford loans, but she has to go through the school, who told her in the past they couldn't help.

WRJ

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Author: legalwordwarrior Big funky green star, 20000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 782641 of 881776
Subject: Re: Student Loans - My Rich Uncle Date: 10/3/2007 10:28 PM
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<<<I didn't have to deal with student loans, so originally I was under the impression that if your families expected contribution was greater than tuition, you couldn't get any federal aid (which is what she was originally told)>>>

I worked in Student Financial Aid at Texas A&M for several years, as well as having put DH through school with their help. Federal grants and subsidized loans are harder to get, but there are ways around it. Is she still being carried as a dependent on her parents taxes? That's a big one. If she's still a dependent, then your assumption that their (alledged)ability to pay is what is taken into consideration. OTOH, if she is independent, then her income would be the only one considered. If her parents aren't willing to help her for school, then they should not count her as a dependent. It would certainly help her to qualify for more assistance for school. So far as private loans go, I've got them and am looking at paying almost 10% in interest in the next year, and I expect it to continue to go up. I'm trying to snowball them as fast as I can. I would strongly suggest that she try to avoid them.

LWW

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Author: jeffbrig Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 782655 of 881776
Subject: Re: Student Loans - My Rich Uncle Date: 10/4/2007 7:54 AM
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I didn't have to deal with student loans, so originally I was under the impression that if your families expected contribution was greater than tuition, you couldn't get any federal aid (which is what she was originally told). Now I am reading differently, that she can get unsubsidized loans Stafford loans, but she has to go through the school, who told her in the past they couldn't help.

I had no problem taking out unsubsidized Stafford loans, despite my family's expected contribution. Unless things have changed drastically in the past 8-9 years, she should be able to do this no problem.

The school is correct in stating that they will not give her any aid. Grants and need based aid are only available when the family can't cover costs of attending. However, student loan money is there for just about anyone who needs/wants help covering expenses.

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Author: 2gifts Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 782660 of 881776
Subject: Re: Student Loans - My Rich Uncle Date: 10/4/2007 8:12 AM
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My kids are about 2 years away from college, so I've been attending all sorts of seminars and reading everything I can get my hands on relative to college admissions and finances. We had a great presentation here at the office, and one of the things the presenter said is that federal direct or Stafford loans are an entitlement, and all anyone needs to do is to apply for one to get it. My understanding is that your financial position effects whether those loans are subsidized or not, but you can get one just by applying.

There are annual limits based on what class level the student is in, but that's about it in terms of limitations, so I'd start there.

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Author: reallyalldone Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 782661 of 881776
Subject: Re: Student Loans - My Rich Uncle Date: 10/4/2007 8:23 AM
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Is she still being carried as a dependent on her parents taxes? That's a big one. If she's still a dependent, then your assumption that their (alledged)ability to pay is what is taken into consideration. OTOH, if she is independent, then her income would be the only one considered. If her parents aren't willing to help her for school, then they should not count her as a dependent. It would certainly help her to qualify for more assistance for school.

This is incorrect or misleading - to be considered independent for financial aid purposes (from www.finaid.com) :

Independent
An independent student is at least 24 years old as of January 1 of the academic year, is married, is a graduate or professional student, has a legal dependent other than a spouse, is a veteran of the US Armed Forces, or is an orphan or ward of the court (or was a ward of the court until age 18). A parent refusing to provide support for their child's education is not sufficient for the child to be declared independent.


rad

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Author: legalwordwarrior Big funky green star, 20000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 782670 of 881776
Subject: Re: Student Loans - My Rich Uncle Date: 10/4/2007 9:53 AM
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rad,

I'm simply going by the practice. If a child is not being supported by their parents and is not carried on their taxes as a dependent, they can be declared as independent. The financial aid offices have forms that are filled out and sent in as exceptions to the rule you listed.

LWW

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Author: SeattlePioneer Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 782671 of 881776
Subject: Re: Student Loans - My Rich Uncle Date: 10/4/2007 10:23 AM
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<<Independent
An independent student is at least 24 years old as of January 1 of the academic year, is married, is a graduate or professional student, has a legal dependent other than a spouse, is a veteran of the US Armed Forces, or is an orphan or ward of the court (or was a ward of the court until age 18). A parent refusing to provide support for their child's education is not sufficient for the child to be declared independent.

rad
>>


Interesting that a 13 year old is independent and can sign up for an abortion on their own, but a 24 year old can be deemed a dependent and tied to the parental apron strings.



Seattle Pioneer

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Author: reallyalldone Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 782674 of 881776
Subject: Re: Student Loans - My Rich Uncle Date: 10/4/2007 10:42 AM
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I'm simply going by the practice.

I've worked with a large number of colleges as well as a state and regional higher ed commission - the exceptions are few and far between and have to be defendable in a review by the Feds. These records would be kicked out as an edit in any financial aid data system I worked on as well so the scrutiny is pretty intense and needs to be more than "my parents aren't willing to pay for college".

For students who are older and returning to school who have a high EFC because the FAFSA is based on the previous year's tax returns, a financial aid officer has more leeway to increase an award based on professional judgement.

rad

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Author: tconi Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 782676 of 881776
Subject: Re: Student Loans - My Rich Uncle Date: 10/4/2007 11:03 AM
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Interesting that a 13 year old is independent and can sign up for an abortion on their own, but a 24 year old can be deemed a dependent and tied to the parental apron strings.

If an abortion cost the Federal Government $10,000/year, you can bet there would be parental financial evaluation.
Also, it is possible that a 13 yr old unable to get an abortion might never have that chance to go to college...

peace & independence
t

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Author: Gingko100 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 782678 of 881776
Subject: Re: Student Loans - My Rich Uncle Date: 10/4/2007 11:33 AM
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If her parents aren't willing to help her for school, then they should not count her as a dependent
I don't think it works this way...these are two separate issues.

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Author: maracle Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 782682 of 881776
Subject: Re: Student Loans - My Rich Uncle Date: 10/4/2007 11:49 AM
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She filled out the FAFSA last week. The expected contribution was over $30K, and school costs $6K a year. She should be going to see the school next week.

Pretty much anyone can get unsubsidised Stafford loans. The expected family contribution is only a factor if you're wanting subsidised Stafford loans. The difference between those 2 is just that you don't accrue interest while in school on subsidised Stafford loans.

A couple years ago when I was still in school you could get around $18,000 a year of unsubsidised stafford loans. As was mentioned, the terms of these loans is very likely to be much better than what a private company would offer.

You should definitely work with your school's financial aid office to understand the system, making the best choices can save you a ton of money over the life of your loans.

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Author: legalwordwarrior Big funky green star, 20000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 782689 of 881776
Subject: Re: Student Loans - My Rich Uncle Date: 10/4/2007 1:52 PM
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<<I don't think it works this way...these are two separate issues.>>

I don't really see it as two separate issues. If you are no longer supporting your child, and said child is over 18, then you shouldn't be listing them as a dependent on your income taxes and getting the dependent child tax credit that goes along with it. It's a matter of drawing the line between privilege and responsibility. You are legally responsible for your child until they are 18 or out of high school if they graduate high school after 18. But if you choose to cut financial ties when the child turns 18, you hamstring the child's ability to get any sort of exemption on the Federal student programs by continuing to claim them on your taxes. While an exemption is hard to get under the best circumstances, it's pretty much impossible if the parents are still claiming the child as a dependent.

LWW

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Author: Minxie Big gold star, 5000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 782691 of 881776
Subject: Re: Student Loans - My Rich Uncle Date: 10/4/2007 2:25 PM
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Hi, lww,

From what I understand, it doesn't matter if your parents claim you as an exemption or not; the government still considers you as "dependent" under the age of 24, unless one of the other stipulations apply. This is true even if you are living on your own, with a job, supporting yourself.

I've never heard of anyone being exempted from this but I have heard from a lot of students who were in the situation I described. Though they were not financially dependent on their parents, they were still considered dependents for financial aid purposes and so had to supply their parents' information as well as their own.

Minxie

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Author: Minxie Big gold star, 5000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 782692 of 881776
Subject: Re: Student Loans - My Rich Uncle Date: 10/4/2007 2:28 PM
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...the government still considers you as "dependent" under the age of 24 for financial aid purposes...

I didn't if that was clear; whether you are an income tax dependent or not, until the age of 24 you are a financial aid dependent unless one of the other stipulations applies.

Minxie

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Author: electrasmom Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 782695 of 881776
Subject: Re: Student Loans - My Rich Uncle Date: 10/4/2007 2:42 PM
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Sorry if I am hijacking this thread but I have a question.

What happens if the parent refuses to fill out and sign the FAFSA. Is the child (young adult actually) able to get any kind of financial aid?

thanks,
electrasmom

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Author: cattleman22 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 782696 of 881776
Subject: Re: Student Loans - My Rich Uncle Date: 10/4/2007 2:53 PM
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{{What happens if the parent refuses to fill out and sign the FAFSA. Is the child (young adult actually) able to get any kind of financial aid?}}

I think the answer is no unless the offspring is married or a veteran. Even then, some programs still required parental information.



c

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Author: reallyalldone Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 782697 of 881776
Subject: Re: Student Loans - My Rich Uncle Date: 10/4/2007 3:12 PM
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What happens if the parent refuses to fill out and sign the FAFSA. Is the child (young adult actually) able to get any kind of financial aid?

Usually not because it was used too often by parents who could afford to pay to game the system.

They can get merit aid but not need-based aid. As far as scholarships, there are merit-based ones out there and I was surprised at some of the offers that my kids received. The most surprising one was for my daughter from a college where she had had no contact. Because she received a 3 year AFROTC scholarship beginning the second year of college, this college offered her scholarship money from the college to cover everything else for 4 years except the first semester's tuition.

For anyone with a high school student, my experience(which is 3 years old and older now) was that merit aid applications were due way bfore a FAFSA. In most cases, it was at the end of the calendar year (for a student entering Fall 08, sometime before the end of 2007).

I was actually in the situation of parents who could pay but didn't. I had a half tuition merit scholarship from the state and covered the other half my last year with a merit scholarship from the college. The rest(including room and board) came from working. I also overloaded and graduated in 3 years to save money.

rad

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Author: legalwordwarrior Big funky green star, 20000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 782698 of 881776
Subject: Re: Student Loans - My Rich Uncle Date: 10/4/2007 3:32 PM
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Of the students we had that were able to appeal, I remember one 18 yr old student who came to us at A&M who had been emancipated at 16. She was able to file as independent. I was simply reminding the OP that the student needed to explore all her options with Federal aid before resorting to private loans.

LWW

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Author: legalwordwarrior Big funky green star, 20000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 782699 of 881776
Subject: Re: Student Loans - My Rich Uncle Date: 10/4/2007 3:35 PM
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<<<For anyone with a high school student, my experience(which is 3 years old and older now) was that merit aid applications were due way bfore a FAFSA. In most cases, it was at the end of the calendar year (for a student entering Fall 08, sometime before the end of 2007). >>>

We had a January 31st deadline, which was 2 months before the actual notifications of acceptance were sent out. We did find ourselves occasionally offering scholarships to students who ended up being denied admission (mostly out of state students)

LWW

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Author: reallyalldone Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 782700 of 881776
Subject: Re: Student Loans - My Rich Uncle Date: 10/4/2007 3:41 PM
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Of the students we had that were able to appeal, I remember one 18 yr old student who came to us at A&M who had been emancipated at 16. She was able to file as independent.

Being emancipated is an entirely different scenario. Parental rights are terminated. Students who are coming out of the foster care system are in the same boat. It's not about parents choosing not to fill out a FAFSA.

rad

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Author: Minxie Big gold star, 5000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 782704 of 881776
Subject: Re: Student Loans - My Rich Uncle Date: 10/4/2007 3:49 PM
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Of the students we had that were able to appeal, I remember one 18 yr old student who came to us at A&M who had been emancipated at 16. She was able to file as independent.

That makes sense because she was emancipated and therefore legally independent. Unfortunately some families cut off the child telling them they are independent because they don't want to pay for college but the gov't doesn't see it that way.

I was simply reminding the OP that the student needed to explore all her options with Federal aid before resorting to private loans.

I quite agree; she definitely should explore ALL options before resorting to private loans. I was just hoping to help clear the mud. :-)

Minxie

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Author: ishtarastarte Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 782705 of 881776
Subject: Re: Student Loans - My Rich Uncle Date: 10/4/2007 3:49 PM
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From what I understand, it doesn't matter if your parents claim you as an exemption or not; the government still considers you as "dependent" under the age of 24, unless one of the other stipulations apply. This is true even if you are living on your own, with a job, supporting yourself.

I've never heard of anyone being exempted from this but I have heard from a lot of students who were in the situation I described. Though they were not financially dependent on their parents, they were still considered dependents for financial aid purposes and so had to supply their parents' information as well as their own.

Minxie


Have personally known no less than a dozen people in this situation.

Ishtar

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Author: Minxie Big gold star, 5000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 782707 of 881776
Subject: Re: Student Loans - My Rich Uncle Date: 10/4/2007 3:58 PM
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Have personally known no less than a dozen people in this situation.

It seems to be more common with students taking longer to finish school and parents relying more on fin aid.

Minxie

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Author: Ibsulon Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 782715 of 881776
Subject: Re: Student Loans - My Rich Uncle Date: 10/4/2007 4:49 PM
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Those students are <expletive deleted>. http://www.finaid.org/otheraid/parentsrefuse.phtml is pretty scary. (It even suggests calling out the IRS on your parents as the reward could be sufficent if your parents are wealthy enough!)

I strongly suggest a faux marriage to someone in the same situation as that. Have a strong prenup.

Marriage is the bond between two people -- unfortunately, sometimes it also has to be a piece of paper for cases like this.

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Author: Davem105 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 782716 of 881776
Subject: Re: Student Loans - My Rich Uncle Date: 10/4/2007 4:54 PM
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I strongly suggest a faux marriage to someone in the same situation as that. Have a strong prenup.

Never heard that term before. Can you explain please?

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Author: reallyalldone Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 782717 of 881776
Subject: Re: Student Loans - My Rich Uncle Date: 10/4/2007 5:03 PM
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I strongly suggest a faux marriage to someone in the same situation as that. Have a strong prenup.

That would be a way to get free room and board for a while for defrauding the government.

rad

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Author: ishtarastarte Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 782718 of 881776
Subject: Re: Student Loans - My Rich Uncle Date: 10/4/2007 5:06 PM
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dave, "faux marriage" = fake marriage.

You also see this in the military, where being married can change how much money you make, where you can live, your duty rotation (sea/shore for navy) and whether or not you're perceived as homosexual. Or you might see it in someone avoiding deportation, where they'll marry a citizen to stay in the States.

It's a marriage "in name only." You get the paperwork, may even live together, but aren't necessarily a real couple.

Yes, it's illegal to do this. But I've seen it done.

Ishtar

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Author: wrjohnston91283 Big red star, 1000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 782719 of 881776
Subject: Re: Student Loans - My Rich Uncle Date: 10/4/2007 5:23 PM
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I worked in Student Financial Aid at Texas A&M for several years, as well as having put DH through school with their help. Federal grants and subsidized loans are harder to get, but there are ways around it. Is she still being carried as a dependent on her parents taxes? That's a big one. If she's still a dependent, then your assumption that their (alledged)ability to pay is what is taken into consideration. OTOH, if she is independent, then her income would be the only one considered. If her parents aren't willing to help her for school, then they should not count her as a dependent. It would certainly help her to qualify for more assistance for school. So far as private loans go, I've got them and am looking at paying almost 10% in interest in the next year, and I expect it to continue to go up. I'm trying to snowball them as fast as I can. I would strongly suggest that she try to avoid them.

Her parent's did NOT claim her as a dependent so she could claim the lifetime learning credit. However, they COULD have claimed her.

Also, from what I've read, tax dependency status is not how financial aid is determined. She is under 24, not married, has no children, is not an orphan/ward of the state, or any of the other criteria to be a dependent for FAFSA purposes. Am I wrong in assuming this?

Also, for the unsubsidized Stafford loans, what are the chances she will need a co-signer? If she does, we are back to where we started.

WRJ

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Author: legalwordwarrior Big funky green star, 20000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 782723 of 881776
Subject: Re: Student Loans - My Rich Uncle Date: 10/4/2007 6:00 PM
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We had students with no credit history at all who got unsub staffords. One student had her parents apply every year for the Parent Plus loan. Their credit was awful, they were always turned down, and then she was able to apply for unsub staffords based on that. Have her talk to the financial aid counselor. Where there's a will, there's usually a way.

LWW

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Author: Gingko100 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 782729 of 881776
Subject: Re: Student Loans - My Rich Uncle Date: 10/4/2007 7:06 PM
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If you are no longer supporting your child, and said child is over 18, then you shouldn't be listing them as a dependent on your income taxes and getting the dependent child tax credit that goes along with it.
"Shouldn't" is an ethical or moral judgement. It can be argued. I happen to agree with you, but wherther or not I do it doesn't matter.

As far as the IRS is concerned they have other evaluation factors to define dependents, and "contributing to your child's" college fund" isn't one of them as far as I know.

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Author: SeattlePioneer Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 782731 of 881776
Subject: Re: Student Loans - My Rich Uncle Date: 10/4/2007 7:46 PM
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<<Unfortunately some families cut off the child telling them they are independent because they don't want to pay for college but the gov't doesn't see it that way.
>>


Interesting that the government wants to deem 13 year old competent to sign up for abortions but 24 year olds are tied to the parental apron strings when the government wants money from the parents.




Seattle Pioneer

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Author: electrasmom Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 782734 of 881776
Subject: Re: Student Loans - My Rich Uncle Date: 10/4/2007 8:33 PM
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Interesting that the government wants to deem 13 year old competent to sign up for abortions

Not in the state of Texas.

Texas law requires notification of your parent if you are 17 years of age or younger.

electrasmom

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Author: Myownigloo Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 782736 of 881776
Subject: Re: Student Loans - My Rich Uncle Date: 10/4/2007 8:35 PM
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Texas law requires notification of your parent if you are 17 years of age or younger.

Wouldn't a parent know if their child is 17 years of age or younger?

MOI
<ducking and running>

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Author: Abfacken Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 782740 of 881776
Subject: Re: Student Loans - My Rich Uncle Date: 10/4/2007 9:08 PM
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>Texas law requires notification of your parent if you are 17 years of age or younger.

Well, you could always take a long road trip to somewhere more enlightened.

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Author: SeattlePioneer Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 782743 of 881776
Subject: Re: Student Loans - My Rich Uncle Date: 10/4/2007 9:13 PM
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<<Not in the state of Texas.

Texas law requires notification of your parent if you are 17 years of age or younger.

electrasmom
>>


Seattle Public Schools provides primary healthcare for children, who can manage their own heathcare decisions without consulting parents.

About half the graduating seniors don't meet state standards for competency in math or writing, but they are all competent to manage their health care.



Seattle Pioneer

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Author: IndecisiveFool Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 782744 of 881776
Subject: Re: Student Loans - My Rich Uncle Date: 10/4/2007 9:25 PM
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Interesting that the government wants to deem 13 year old competent to sign up for abortions but 24 year olds are tied to the parental apron strings when the government wants money from the parents.

You just reran your previous response from earlier in the thread. What is the matter? Are you unsatisfied that you didn't create enough replies the first time that you needed to post it again? Maybe people just don't want to take your bait anymore.

IF

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Author: wrjohnston91283 Big red star, 1000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 782749 of 881776
Subject: Re: Student Loans - My Rich Uncle Date: 10/4/2007 11:21 PM
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We had students with no credit history at all who got unsub staffords. One student had her parents apply every year for the Parent Plus loan. Their credit was awful, they were always turned down, and then she was able to apply for unsub staffords based on that. Have her talk to the financial aid counselor. Where there's a will, there's usually a way.

Do the parent's have to actually apply for them? It doesn't seem right that they would knowingly hurt their credit score further.

WRJ

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Author: Minxie Big gold star, 5000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 782762 of 881776
Subject: Re: Student Loans - My Rich Uncle Date: 10/5/2007 7:59 AM
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Seattle Public Schools provides primary healthcare for children

Hi, SP,

How does this work? Is this the nurse with aspirin or is it more of a medical clinic atmosphere? I've not heard of a public school providing primary healthcare for children; our school requires a written note from me before they will give my son any type of medication and a written note on file in the event there is an emergency and he needs medical treatment.

Minxie

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Author: DeltaOne81 Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 782767 of 881776
Subject: Re: Student Loans - My Rich Uncle Date: 10/5/2007 10:03 AM
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"Shouldn't" is an ethical or moral judgement. It can be argued. I happen to agree with you, but wherther or not I do it doesn't matter.

As far as the IRS is concerned they have other evaluation factors to define dependents, and "contributing to your child's" college fund" isn't one of them as far as I know.


College fund, no. But it does kinda play in. One criteria to claim your child as a dependent is that they don't provide more than half of their own support.


A student loan responsible for payment by the child is not considered support by the parents. According to this line in Pub 501, Worksheet 1, which defines support provided by the person themselves, amounts borrowed count:
"Enter the total funds belonging to the person you supported, including income received (taxable and nontaxable) and amounts borrowed during the year, plus the amount in savings and other accounts at the beginning of the year"

Therefore, if a student pays for their own college and life such that more than half of their costs are paid by themselves and their own responsibility, the parents can *not* claim them as a deduction.

This is all for federal income tax purposes though, not FAFSA.

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Author: legalwordwarrior Big funky green star, 20000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 782774 of 881776
Subject: Re: Student Loans - My Rich Uncle Date: 10/5/2007 12:56 PM
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Do the parent's have to actually apply for them?>>

Yes, the parents had to apply for the loan. Yes, they knew they wouldn't get the loan. At the time, I don't think they were too worried about their actual credit score, they just wanted their daughter to go to college any way she could.

LWW

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Author: Ibsulon Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 782818 of 881776
Subject: Re: Student Loans - My Rich Uncle Date: 10/6/2007 7:27 PM
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I'd be curious where it's said to be illegal -- I've never seen that one.

I also know it was common at ORU to be able to live off campus, from someone I know who went there :)

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Author: llamalluv Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 782845 of 881776
Subject: Re: Student Loans - My Rich Uncle Date: 10/7/2007 5:00 PM
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I've never heard of anyone being exempted from this but I have heard from a lot of students who were in the situation I described. Though they were not financially dependent on their parents, they were still considered dependents for financial aid purposes and so had to supply their parents' information as well as their own.

Minxie


Have personally known no less than a dozen people in this situation.


And it sucks to be one. I had to basically GUESS what my mother's actual earnings were, as well as the amounts of public assistance she received in my second year at school (after she had thrown me out of "her" house).

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Author: HesNotThere One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 782852 of 881776
Subject: Re: Student Loans - My Rich Uncle Date: 10/7/2007 5:58 PM
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Does anyone have any experience with MyRichUncle for student lending? I have a friend who is looking for student loans (non-federal at this point, although she should be speaking with her school's financial aid office next week).

She doesn't meet Citibanks no cosigner criteria (doesn't make enough money), and doesn't have a cosigner (this is set in stone).

MyRichUncle's website talks about how they cater to borrowers with little or no credit history, so on its face, and they do alternative credit scoring.

Thanks
WRJ


My suggestion would be that your friend probably does not have the realistic financial ability to go to college at this point. She should seriously consider working hard at a job for a couple of years, build up her savings and her credit, and think about whether college is right for her, and if so, what would be practical and appropriate.

The fact that she cannot under any circumstances get a cosigner is a big red flag concerning her ability to manage her finances and behave responsibly. If she wanted to get an engineering, computer science, or business degree, that would be perhaps something worth going into hock for; if she just wants to extend high school for four years, go on drinking binges, and possibly have a liberal arts degree at the other end, then she should definitely not waste her time or her money on college.

The idea that people should borrow, borrow, borrow for college just because they haven't thought of anything better to do after high school is pernicious.

Odds are your friend will end up worse off in four years then she is now: waste of four years, in hock up to her eyeballs with college debt, with no useful job skills.

Maybe she should go into the military for a few years until she gets her head on straight.

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Author: wrjohnston91283 Big red star, 1000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 782872 of 881776
Subject: Re: Student Loans - My Rich Uncle Date: 10/7/2007 10:40 PM
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My suggestion would be that your friend probably does not have the realistic financial ability to go to college at this point. She should seriously consider working hard at a job for a couple of years, build up her savings and her credit, and think about whether college is right for her, and if so, what would be practical and appropriate.

The fact that she cannot under any circumstances get a cosigner is a big red flag concerning her ability to manage her finances and behave responsibly. If she wanted to get an engineering, computer science, or business degree, that would be perhaps something worth going into hock for; if she just wants to extend high school for four years, go on drinking binges, and possibly have a liberal arts degree at the other end, then she should definitely not waste her time or her money on college.

The idea that people should borrow, borrow, borrow for college just because they haven't thought of anything better to do after high school is pernicious.

Odds are your friend will end up worse off in four years then she is now: waste of four years, in hock up to her eyeballs with college debt, with no useful job skills.

Maybe she should go into the military for a few years until she gets her head on straight.


She is currently a 2nd semester junior. She doesn't have bad credit, she has little/no credit. She lives at home and works two jobs. A night out for her means she is babysitting. She has paid her way for the first five semesters. Citibank has a requirement that you must make $18,000 to have no cosigner. She only wants to borrow $6K. If she made $18K, she would not need to to borrow.

I appreciate your taking time for a response, however, you did not address the question at hand, and attacked someone's character who is not here to defend herself. As I have said before, I am very clueless regarding student loans, and have reached out for the community's assistance. If you do not want to provide thoughtful insight to the topic, then do not respond. You have been added to my ignore list and should not expect a response.

WRJ

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Author: HesNotThere One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 782889 of 881776
Subject: Re: Student Loans - My Rich Uncle Date: 10/8/2007 9:34 AM
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She is currently a 2nd semester junior. She doesn't have bad credit, she has little/no credit.

What's the difference? Either her credit history is sufficient for her to get a loan, or it's not. Apparently, it's not. Are you telling me that a junior in college who has successfully paid her way so far has never had a credit card? Since some of these companies are even sending out pre-approved credit card applications to dogs and babies, I find it very difficult to believe that your friend has been unable to establish a credit history. Perhaps you have been provided with incomplete information?


She lives at home and works two jobs. A night out for her means she is babysitting. She has paid her way for the first five semesters. Citibank has a requirement that you must make $18,000 to have no cosigner. She only wants to borrow $6K. If she made $18K, she would not need to to borrow.

Citibank is not the only bank/lender around. Why the focus on Citibank? Also, if she has successfully managed to pay her own way without needing a loan to this point, it is relatively obvious that there's probably been some sort of change in her circumstances. And you also haven't explained why, if she's living "at home"--and I assume that means with her parents--and has been financially responsible to this point, her parents aren't willing to simply co-sign a loan for her? That obviously would be the simplest resolution to her problem. It would allow her to get the loan she needs right now as well as to begin to establish a credit history. If her own family won't trust her enough to repay the loan, and not leave them on the hook for it, why shouldn't that be regarded as a red flag?


I appreciate your taking time for a response, however, you did not address the question at hand, and attacked someone's character who is not here to defend herself.

No one attacked anyone's character. You provided incomplete information which was responded to appropriately. The additional information you have now provided raises more questions than it answers. I am afraid either your "friend" is not being fully candid with you; or perhaps you are not being fully candid with us. I cannot imagine any parent who, if confronted with a situation of a very hard-working child, living at home, who is working two jobs to get through college, and needs a co-signer to get a loan and to establish a credit history, would not happily consent to doing so. Unless of course they regarded the borrower as too much of a credit risk. That also ties in with a college junior who claims to have "no" credit history.

As I have said before, I am very clueless regarding student loans, and have reached out for the community's assistance. If you do not want to provide thoughtful insight to the topic, then do not respond. You have been added to my ignore list and should not expect a response.

WRJ


I think you can disregard whatever you choose to disregard. Putting your head in the sand however will not help your friend achieve what she wants to achieve. If she has no credit history and needs to establish one in order to get a loan, then she needs to establish a credit history. If in order to do so she needs a co-signer, then she needs a co-signer. You have provide absolutely no objective information indicating why your friend has failed to ever establish a credit history in the past, even though a junior in college; nor why her parents would unreasaonbly be unwilling to co-sign a loan for her, given your claim that she is apparently a completely responsible individual.

When the alleged facts do not fit the scenario, then the facts must be questioned. I have done so. Getting angry at me about that won't help your friend at all.

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Author: HesNotThere One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 782891 of 881776
Subject: Re: Student Loans - My Rich Uncle Date: 10/8/2007 9:37 AM
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I'm sorry.

I believe it just dawned on me what your friend's problem might be.

Does she have a social security number?

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Author: Minxie Big gold star, 5000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 782895 of 881776
Subject: Re: Student Loans - My Rich Uncle Date: 10/8/2007 9:59 AM
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Hi, WRJ,

Sorry I'm late to this thread but has your friend looked into scholarships or grants? There are many scholarships available, particularly if she's a member of any organizations or if her parents are. She can search at www.fastweb.com by putting in her profile; their site actually does the searching and will email you updates.

Minxie

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Author: markr33 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 782917 of 881776
Subject: Re: Student Loans - My Rich Uncle Date: 10/8/2007 12:25 PM
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She is currently a 2nd semester junior. She doesn't have bad credit, she has little/no credit. She lives at home and works two jobs. A night out for her means she is babysitting. She has paid her way for the first five semesters. Citibank has a requirement that you must make $18,000 to have no cosigner. She only wants to borrow $6K. If she made $18K, she would not need to to borrow.

I think the big question here is - why are her parent unwilling to cosign her loan. ("this is set in stone" from your original post) After all, they are willing to allow her to live in their home, which provides substantial support, both financial and otherwise, and likely also contribute to various other expenses (food, tuition, etc), so why aren't they willing to risk another $6k to allow her to complete her education and better herself? Not to mention that she sounds like a very responsible (2 jobs, etc) young woman and most likely won't stiff her parents by not paying off the loan in a timely manner!

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Author: wrjohnston91283 Big red star, 1000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 782974 of 881776
Subject: Re: Student Loans - My Rich Uncle Date: 10/8/2007 4:56 PM
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I think the big question here is - why are her parent unwilling to cosign her loan. ("this is set in stone" from your original post) After all, they are willing to allow her to live in their home, which provides substantial support, both financial and otherwise, and likely also contribute to various other expenses (food, tuition, etc), so why aren't they willing to risk another $6k to allow her to complete her education and better herself? Not to mention that she sounds like a very responsible (2 jobs, etc) young woman and most likely won't stiff her parents by not paying off the loan in a timely manner!

It's not that they are unwilling...they can't due to their credit. They provide housing, car and health insurance, but for pretty much all other expenses, she is on her own. She should be visiting the student loan office this week to hopefully get some more information. If that does not work, we wuill go back to looking at other companies for private loans.

WRJ

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Author: cocomontgomery Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 782979 of 881776
Subject: Re: Student Loans - My Rich Uncle Date: 10/8/2007 5:34 PM
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Hello, I am new here so please don't be two harsh. I worked for many years at a local
university as a financial aid counselor. the way it works is your friend is a dependent student for financial aid purposes because she is single, no children, not in the military and does not meet any of the excemptions required to make her an independent student. It does not matter at all whether her parents claim her as a dependent on their tax returns or not. That being said, and from what I know, she is not qualified for need based financial aid (federal or state grants & subsidized stafford loans or perkins loans) Basically, her problem is that in order for her to get unsubsidized student loans, her parents must apply for a PLUS (parent) Loan. Which they would get in their name and which they (or one or the other) would have to pay back themselves. From my experience many parents simply refuse to apply for the PLUS Loan. Thereby, giving the potential student no hope of getting any assistance at all. I believe this is the case with your friend. If the parent (or parents) do apply for PLUS Loan and are denied (and there is little or no chance of being approved), then your friend would be eligible for the Stafford Unsubsidized Loans. The loan would be in her name and she alone would be responsible for repaying it. The parents would not be required to be a co-borrower, as they did away with co-borrower on student loans many years ago. As I see it your friend has basically two options,

1. Talk to her parents again and ask them if they will at least submit an application to see if they would be approved or not. If the loan was approved, they can always change their minds and refuse to accept the loan if they really don't want it.

2. If your friend or her parents have had a change in income, say in the last 12 to 18 months and have LESS money to live on now, she can ask her financial aid counselor to base her financial aid on her and her parents current income, which may or may not make her eligible for need based aid (as mentioned earlier).

The fact is your friend is in a very difficult situation and without her parents support it might be better for her to work full-time till she turns 24, then she could apply for financial aid as an independent student.

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Author: sunflare Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 782981 of 881776
Subject: Re: Student Loans - My Rich Uncle Date: 10/8/2007 6:01 PM
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Are you telling me that a junior in college who has successfully paid her way so far has never had a credit card?

Actually, yes, I believe that's perfectly possible. I've known many people, including my DH, who preferred to pay for everything in cash. If he didn't have the cash on hand (or in the ATM) to pay for something, he didn't buy it. He also never really needed a credit card for travel or work or whatever - he was in the military for many years. I finally added him to my longest history credit card (at that time...maybe 12 years?) after we got married just so that he'd have some sort of credit history for when we started looking for a house.

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Author: wrjohnston91283 Big red star, 1000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 783008 of 881776
Subject: Re: Student Loans - My Rich Uncle Date: 10/8/2007 9:03 PM
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Hello, I am new here so please don't be two harsh. I worked for many years at a local
university as a financial aid counselor. the way it works is your friend is a dependent student for financial aid purposes because she is single, no children, not in the military and does not meet any of the excemptions required to make her an independent student. It does not matter at all whether her parents claim her as a dependent on their tax returns or not. That being said, and from what I know, she is not qualified for need based financial aid (federal or state grants & subsidized stafford loans or perkins loans) Basically, her problem is that in order for her to get unsubsidized student loans, her parents must apply for a PLUS (parent) Loan. Which they would get in their name and which they (or one or the other) would have to pay back themselves. From my experience many parents simply refuse to apply for the PLUS Loan. Thereby, giving the potential student no hope of getting any assistance at all. I believe this is the case with your friend. If the parent (or parents) do apply for PLUS Loan and are denied (and there is little or no chance of being approved), then your friend would be eligible for the Stafford Unsubsidized Loans. The loan would be in her name and she alone would be responsible for repaying it. The parents would not be required to be a co-borrower, as they did away with co-borrower on student loans many years ago. As I see it your friend has basically two options,


So if the parents apply, and do get approved, can they refuse and she still get unsubsidized loans, or do they actually have to follow through with them?

I understand why the rules are made this way (to prevent parent's from simply saying "I don't want to pay" so their kids can get aid), but it also prevents students from being able to go to college due to their parent's problems, not their own.

WRJ

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Author: cocomontgomery Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 783015 of 881776
Subject: Re: Student Loans - My Rich Uncle Date: 10/8/2007 11:06 PM
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No, If the parents applies and do get approved they will have two choices
1. Accept the parent loan which will also enable the student to get an unsubsidized loan as well or

2. Refuse to accept the parent loan, which will not help your friend because she will not be able to get an unsubsidized loan either. That is the rule, probably because the parents are unwilling to do their part for whatever reason.

I think I read on one of your posts that the parents credit worthyness is not read good. That is why I say that if the parent (one or the other) applies and the loan is denied, then your friend will be able to go ahead and get the unsubsidized student loan. This is because the parent is determined to be not eligible for the PLUS (parent) loan.

The best thing to do is to ask the parent with THE WORST credit rating to apply for the PLUS (parent)loan in the hopes that it will be denied.
Assuming it is denied, the parent would then not be eliglble for the PLUS (parent) loan and the parent would no longer be asked to do anything. And best of all, your friend could then get an unsubsidized student loan up to the amount of eligibility limits.

For people in this situation, sometimes a college or university will ask the parent or student to set up a monthly payment plan to cover the costs of tuition books room board etc... This type of plan (which your friend is propably already aware of and may have done in the past) means they would be paying the costs out of their own pocket. They always have the power to say NO. However, if the loans don't pan out for your friend then setting up a monthly payment plan may be the only other options.

I am sorry, I know nothing about private student loans. but I do know it is ALWAYS better to get financial aid through the schools if at all possible.

Hope this was helpful, if you have any more questions just let me know!

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Author: cmm3 One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 783020 of 881776
Subject: Re: Student Loans - My Rich Uncle Date: 10/9/2007 1:24 AM
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I received a dependency override at my school. Your parents not willing to help fund your education is not enough. You need to fill out forms as to why you are asking for it, submit documentation (court papers, doctor papers), etc..

I received it on the grounds of emotional abuse. I had 10 years of documentation. It was hard to get all the paperwork and to draft the 2 page letter, but in the end, it was worth it.

All requests are reviewed by the head of financial aid. However, some do slip through the cracks and are granted independent status.

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Author: wrjohnston91283 Big red star, 1000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 783071 of 881776
Subject: Re: Student Loans - My Rich Uncle Date: 10/9/2007 4:29 PM
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cocomontgomery

Thanks for the response about PLUS loans. I will pass that information on. I am fully aware that private student loans are only a step above personal lines of credit, but I was under the impression that if tuition was less than the family's expected contribution, they were the only option left. I did not no that any Stafford loans were available regardless of goverment determined need.

WRJ

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Author: cocomontgomery Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 783080 of 881776
Subject: Re: Student Loans - My Rich Uncle Date: 10/9/2007 5:40 PM
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You are welcome, hope it helps!

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