Debt Level Going In

[JimmyO]

OK, so like a lot of other Americans, my wife and I have managed to get ourselves into a consumer debt (read: credit card) pickle.

We're on a strict budget though, and are on pace to have it almost completely gone by the time I'd start school next fall. The fact that I'm looking at public schools in lower-cost cities coupled with my wife's job which allows her to make decent money just about anywhere should help us continue to pay bills while I go to school. I will need loans (don't have the numbers for scholarship $), but won't let that stop me.

Is anyone else facing a similar situation?

Ideally, our credit card debt will be gone by the time I start, but we'll still have a car payment, rent, my wife's student loans, the usual stuff. I'm completely ignorant about financial aid constraints - I was fortunate enough to have my UG paid for. In the event my wife's income isn't enough to cover all expenses, can loans be applied to help cover living expenses? Would my wife's income adversely affect the amount of aid available to me?

Any other thoughts about debt and beginning LS are welcome, of course.

[66scorer]

I am applying to UNLV Boyd School of Law and in their catalog, they discuss a Federal Direct Plus Loan for Graduate Students.

To quote the catalog:

"The Grad PLUS program is a non-need-based federal loan that allows graduate students to borrow up to the full cost of attendance, minus any other finanacial aid they are receiving.  This program may be of interest to students who:

1.  have little or no eligibility for need-based financial aid programs; and

2.  need additional assistance to pay college costs after other forms of aid have been awarded.

Students may qualify for Federal Direct PLUS Loans for Graduate Students by completing the 2008-2009 FAFSA."

Hope that helps!

[Ender Wiggin]

Each school sets a budget for what you can borrow for living expenses.  I think (in most cases) that is around 15-20k (closer to 15), depending on your circumstances.  (If you have children, if you need to pay more for health insurance, etc.)

[JimmyO]

Excellent thoughts. Thank you all.

[TRad]

If your need is greater than a single student, the college can certify a higher "COA" (cost of attendance) for you.  However, it still won't be very high.

My credit union also offers a loan for pretty much any purpose I might have while I'm in school -- up to 40k per year, payments deferred until graduation, interest accruing while in school (8% APR right now; 20 year repayment schedule).  They call it the TOPS loan (Tuition Option Program).  Ask your bank or credit union.

I am a single mom with 2 kids, so I will def. be using this kind of financing.

Good luck!

[El_Che]

I was under the impression that one could only borrow up to $18,500 from the federal program, which doesn't look at credit worthiness, and that after that level you had to search for private loans, which all depend on credit worthiness. Is this not correct?

[Ender Wiggin]

I was under the impression that one could only borrow up to $18,500 from the federal program, which doesn't look at credit worthiness, and that after that level you had to search for private loans, which all depend on credit worthiness. Is this not correct?

That sounds about right to me.

[filet o' fish]

There are basically 5 types of loans you can get.

The school will look at the cost of attendance, consider your family EFC (and possibly that of your parents, even if you are older, have your own family, etc.). From there they will calculate your need, less any scholarships, and typically start with:

Federal Direct Subsidized (no interest accrual during school): I believe the limit on that is 8,000.
Federal Direct Unsubsidized (interest accrues during school): I believe the limit on that is 12,500.

Most schools usually give both out at the maximum level. Depending on how much money you still need, schools will give out:

Grad PLUS loans, sometimes offered through the Federal loan program, more often offered through a lender. The rates on these loans are usually pretty high, at or around 8%. Be careful with these.

Sometimes the school will give out their own loan or scholarship, depending on the school.

In rare cases you will need to go through a private lender to get extra financial aid. These are risky, so be careful and study up on them. Your credit history will be a big factor in determining your interest rate, and there are a lot of different repayment plans, so pay attention.