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Student loan — Whoa! Stop right now, says Terry!

By Terry Savage on February 21, 2021 | College Savings / Student Loans

Hello Terry, I have a few questions, I’m a single mom, and my daughter is a in her second year on Indiana University of Bloomington. For her junior year we must apply for student loan, we arleady did a FAFSA but is still not enough to cover her tuition, she need around 24K for whole school year, it will be very challenging for us, my credit score is very poor. I’m currently looking for co-signer, once I hope find one I thought about to parent plus loan, but maybe you have better idea where to look, and what type of loan will be best option for our family. Along with that loan I must buy her a used car, that is dragging to another question, ill want to buy a car on her name, to build her credit, currently she have small credit card, lease apartment, and utilities is on her name, everything is pay in full and on time monthly. Hope she will qualifying for around 10K. Witch loan she should apply first (student or car), if she will be qualified for car, is that affects student loans and she could be rejected to get student loan? Or other way around? If we can find co-signer and she will get her student loan, it will possibility she won’t be approved for car loan. Hope my questions been understandable for you, my English is not best.

Terry Says

— STOP– STOP! Stop right now!! I can understand your desire to have your daughter get a great education, but you are going about this in all the wrong ways. Instead you will bury both of you in a lifetime of debt. This is the time to stop and do some thinking.
Before anything else, go online to Amazon and buy this book: (click for direct link) Ron Lieber’s new book, ” rel=”noopener” target=”_blank”>The Price You Pay for College. For less than $20 you can have it in your hands tomorrow before you make some VERY expensive mistakes.

Then, please read this new column I just posted on my own website, reviewing his book and explaining how to nicely ask for more money.

But here are my own personal responses to your questions:
1. DO NOT take out a Parent Plus Loan. They are the most expensive, when you count all the fees.
2. Do NOT search for a co-signer for private student loans. You won’t get one if your credit is bad — and that means you already have a lot of debt.
3. After reading the book and the column, you might be able to discuss need with the financial aid office and “merit” aid with the admissions office to cut into the gap. If they really want her, they may make a bit more money available.
4. But if there is still too large a gap, then you have to examine alternatives — such as a local community college, where you are sure all credits will transfer. Or finding a job at school to cover her board (maybe a dorm advisor?)

And that is important. I know you want the best for your child, and it appears that you have spent a long time, a lot of effort –and a lot of money — trying to do that. But just STOP right now. A college education is important — but not at the cost of ruining both of your future financial lives. Please read that book!

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