College student - I'm a 'dependent' and my parents won't apply for the Parent PLUS loan or cosign a private loan

Question

This is currently happening to a friend.

She is 19 years old and doesn't qualify as an 'independent' on the FAFSA. Her parents refuse to apply for the Parent PLUS loan and also refuse to cosign for a private loan through a credit union. She doesn't have anyone else to cosign a loan.

She can only afford to take 6 credits with the financial aid she received and because rent is so high, she would barely be able to afford that working 25 hours per week.

What can she do to have enough money to pay for tuition and rent?

Answer 1

My son is in a similar situation where he is 21 and in college. My wife and I claimed him as a dependant on our taxes last year. He had still been able to get some student loans as a dependant as well as scholarships. I have told him that we will not cosign on a loan for him. It isn't because we don't like our son, it is simply because too many unexpected things can happen.

He has been working multiple jobs which is one thing I would suggest as well as donating plasma for extra money to have a social life. As an electrical engineering major he doesn't have much time to be social. He cuts rent by having roommates and does most of his own cooking to help with food costs. The main thing he does to keep his costs under control is attends a school that isn't outrageously expensive. An expensive school does not offer as much benefit for an undergrad degree as it might for a graduate degree.

Another option is to look for a job that had some sort of tuition assistance. Another option along that same line is look into military service either active duty or reserves as there is tuition help to be found there.

There are options that don't involve debt. As a side note my son used a student loan last year however, this coming year he has his budget figured out and he will not be needing one at all.

Answer 2

Smart parents not wanting to get stuck with a student loan or co-signing on a loan.

because rent is so high

Are you able to live with your parents? Is there anyway to reduce the cost of rent like renting a room? Can you move somewhere where the rent is cheaper?

working 25 hours per week

Working 25 hours per week and taking 6 hours is a pretty light schedule. It is not even 40 hours per week. What is stopping you from working 40 hours and paying for school from your salary?

In my own life I created a pretty crappy situation for myself when I was a young man. I really wanted to go to a prestigious university, but ended up going to a community college, and then to a university that was lesser known in a less expensive area. I had to work like crazy, upwards of 50 hours per week. I also took a full load in a difficult degree program.

You probably don't have to go to the extremes that I went through, but you can work more. Most adults work at their jobs well more than 40 hours per week, then come home and continue to work (on the house, raising kids, trying to start a side business, etc...). So you might as well become an adult now.

There are ways to become independent from your parents for FAFSA like have a baby, get married, or join the military. I'd only recommend the last one as you will also receive the GI Bill. Another option is to try and obtain a job that offers financial aid.

Answer 3

I was in a similar (but not quite as bad situation) a couple years ago, and I had a stroke of luck that helped me, but your friend might be able to force a similar situation.

My parents refused to take out the huge parent loan (understandably so), but my dad made enough money that I wasn't eligible for much aid. My stroke of luck came when they got divorced; I could refile my FAFSA with only one parent (using my mom with very little income), my aid shot through the roof and nearly covered my undergrad (this happened in California, I don't know if this works in other states).

My advice for your friend would be to take the 6 units/part time job option, but do what she can to earn enough to pay her own rent/food/other bills. I think the requirement for filing as an independent is that you supply >50% of your own income. It won't kick in right away, but for next school year this would end up getting her a lot more money from the state/federal governments. For me it was enough to cover my school, food, rent, gas, car payment, and still have a little left over.

(I don't know if this is still possible, and I know it doesn't work for graduate school, or if it applies to every state. It might be an option worth pursuing though)

Answer 4

If the 6 credits per semester working part time schedule includes no loans, consider this. Yes, it may take you twice as long to finish, BUT, you'll have a lot of working experience, AND zero student loans when you're done.

Compare this to someone who graduates in four years and has 20k in student loans. If they set up a 20 year repayment for the loans, they'll still have 16-18k left to pay and 4 years of job experience.

You'll have 8 years of half time job experience and zero debt. The key would be to find a job in your area of interest. More ideal would be one that pays for classes as a benefit. Then you might increase your class load and decrease the total time to graduate, AND have relevant job experience when you graduate.

Answer 5

I was in that same situation years ago with my parents. One way she could apply for a loan in her name without her parents is if she is not currently living with them she shouldn't need them to cosign if she doesn't have bad credit.

But if she isn't living with them and they aren't financing her room and board they can't claim her as a dependent so if she really wants to stick it to them she can go and try to politely explain how the loans work and tell them if they don't cosign for her then she will apply on her own (which she can only do while not living with them I believe but not sure) and they will HAVE to STOP claiming her as a dependent on their taxes. If they don't agree she can put her foot down and force them to stop claiming her and tell them she will file her own application anyway and if they continue claiming her and get in trouble for it it's their own fault cause she warned them to stop first.

They may agree to cosign rather than lose her as a dependent if it makes that big of a difference on their taxes, if they don't then she can forcefully punish them financially and their taxes will go up. Those were my choices when my parents refused to cosign for me to live at school but that was back in 1999-2000 and things may have changed since then, things also change state by state and I live in PA.