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Oh man - what a difference a year makes!

July 29th, 2009 at 01:51 am

I applied for a private student loan for my college daughter, and I was turned down, even with me as a co-signer, they said because of my credit rating! And last year I got one at 1% over prime. So in one year I apparently went from a very good rating to trash? I think the credit crunch is hitting big time!

This really stinks. I had planned to use loans to get both daughters through, and then once I could withdraw from a 401k after age 59.5 to get them paid off. But I was concerned that this might happen. Why have I died and gone to hell?

8 Responses to “Oh man - what a difference a year makes!”

  1. NJDebbie Says:

    Ralph,

    I'm so sorry you're going through this. I am taking the liberty of giving my two cents because I went through the same thing. I'm worried that you would exhaust your retirement money to pay off college debt for your daughters. I know that as a parent you feel the obligation to pay for college and I felt the same way too, but there are alternatives to funding college. My son who was an excellent student in a competetive high school opted to attend community college as oppose to a 4 year college because I was very frank about my opinion on private student loans. I know that community colleges have the reputation of being for slackers, but I as an educator myself, I feel that the slackers will eventually flunk out of junior college and the good students will continue to a four college. Private loans will not be forgiven in case of a bankruptcy. The son of one of my collegues went to a four year college for two years at a tune of $60,000 and will be attending community college this fall. I'm not saying that this will be the case with your daughters, but it can happen to the best of kids. Can you be candid with your daughters about your financial situation? There is only so much you can do with what you have even when it tears your heart apart. Ask yourself who is going to take care of you in old age (without a retirement fund)?

  2. monkeymama Says:

    I'm sorry!

    I think I posted along the same lines a while ago (probably - sounds familiar as I read Debbie's comment) but I have to agree with her. My parents did not pay for my college, I had a wonderful affordable education, and I do have a wonderful career. An expensive college is certainly not everything. It is not a need for a successful financial future. Community college for 2 years is a wonderful way to keep costs down. One of the best classes I took in college was a summer class at the community college. plus, it cost pennies. I wouldn't knock it. Without community college, not sure my dad would have ever gotten a college degree either.

    KEep your chin up - it will be okay.

  3. baselle Says:

    Keep your chin up! You just dodged a bullet. Private student loans have the worst rates and the most evil clauses of any loan product. Make sure you check out any federal financial aid option first, and make sure that your daughters apply for scholarships, work study, and summer work to earn money. I think you will have to come clean with your daughters - they have to know that you aren't fooling with them and this credit crunch is no joke.

  4. creditcardfree Says:

    What about federal student loans? Have you spoken to the college financial aid department? They would have experience to guide you to multiple options. Your child may have to work while in college.

  5. M E 2 Says:



    Well, the road to hell IS paved with good intentions.


    Yikes! Hard to believe in this day and age that ANYONE could/should/would EVER think about dipping into their retirement funds to pay for someone else's education.


    All together now ..... "You CAN finance an education, you CANNOT finance a retirement"


  6. ralph Says:

    Well, M E 2, I would agree with you that UP UNTIL THIS YEAR you could finance an education. I have heard similar stories of people with great incomes and assets and no debt also being turned down for student loans - but in their case at least they have savings.

    And baselle, my experience was that Discover private loans have far better rates than even the Stafford loans. She did get a $7500 Stafford unsubsidized loan, so actually that's probably enough credit for this year's college.

    I am trying to get the younger to consider the two year community college gig, but now my wife says that you can't do that for engineering, but I'm sure it has been done.

    For now, I have to see why I was refused - I suspect it's too much debt! Hmmm, is digital TV reception any better than the old analog? I have been wanting to ditch Comcast for YEARS. How is Verizon's $17.99 Internet service? I have to make another run at convincing my wife that this is serious stuff.

  7. NJDebbie Says:

    Ralph,
    I'm not sure how your state community colleges work, but our county community college has billboards title "I started right" which are testimonials of people whom have become dentists, scientist, lawyers, among other professions. I attended a community college and when it was time to transfer to a four year college all of my credits were accepted and I also got a transfer student scholarship which entitled me to half of the tuition and it was not need based. You should call and see what they offer.

  8. Jerry Says:

    Ditto to NJDebbie. I'm finishing medical school right now, and I started out at a community college. It was cheaper, and it took care of all of the general education requirements for my state university! It's not all fancy, but it is cheaper, and it can lead to a fancier school (sometimes with a scholarship) if the student does well there. I was accepted to a number of private and public universities out of CC, and had the insurance that all of my credits were accepted. All in all, it was a good way for me to start out, coming from a poor family and not having much money for school.
    Jerry

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