Loans to cover more than just the cost of classes

JaxiaKiley · Sep 19, 2006

Be sure to apply for loans while you still have a job. It will help you get approved.

maryshome8 · Sep 19, 2006

Word of caution:

I'm changing careers after working in the lending industry for that last 10 years as an underwriter (that is the person that actually approves your loan).

I wanted to post this for you, and anyone that reads it, to be very, very careful on the amount of money you take out for student loans. I've seen numbers on this board as high as $80K.

You will have to pay back about $10.00 for every $1,000 you borrower per month. If you get into trouble, you CANNOT file for bankruptcy to get out of your student loans.

I've seen it over and over again for years. Student loan debt will haunt you financially forever if you cannot pay it back.

Remember that not every nurse makes huge bucks in the industry, some can't get the higher paying jobs, circumstances don't allow for it because of family obligations, whatever. I have seen firsthand how it affects people financially and once it's done, and you are in trouble, it is worse than bankruptcy, b/c at least a BK goes away (as far as the lender's are concerned) after about 3 years.

Epona · Sep 20, 2006

Ok. Maryshome8... I am confused. School for two years will cost me a total of $30,000 for my BSN. On top of that I will seek around $36,000 to live on for two years. Total for all costs will be $66,000. Do what will be my monthly payment be after school if I get these loans doing your $10 for every $1000??

Would it be $660 a month??

Thanks for sharing the good advice!! Epona

squirtle · Sep 20, 2006

Thanks for the advice... but where and how do I apply for such loans? Are they loans you apply for outside of the student loans you receive from filling out the FASFA? I thought that capped off at like $3500 for a second year student, and that isn't going to be enough to get me by.

I am sorry I have so many questions... I am just completely stressed out about this.

Also, I realize last night I am a bit messed up as far as financial aid & loans go. When I filled out my paperwork this year, I set it up so $ was disbursed to cover classes for Fall and Spring terms. Well, I was hoping to begin nursing school in May which would be summer term. I won't have a disbursement again until the Fall. Ugh!

maryshome8 · Sep 20, 2006

Yes, that is about right. The other thing you need to consider is fluctuations in the interest rate. So your monthly payment can actually be higher than that some years. I'm not sure what your living situation is right now, but what you should do is figure up what a mortgage or rent will cost you, add up the rest of your expenses, credit card payments, etc. Then add in your student loan....divide this figure by your expected MONTHLY salary...if the percentage you come up with (it will be . something) is more than 45%, trust me, you won't be able to afford to keep the lights on, or apply for another loan (such as if a car breaks down and you need to purchases another one, etc).

Ok. Maryshome8... I am confused. School for two years will cost me a total of $30,000 for my BSN. On top of that I will seek around $36,000 to live on for two years. Total for all costs will be $66,000. Do what will be my monthly payment be after school if I get these loans doing your $10 for every $1000??
Would it be $660 a month??
Thanks for sharing the good advice!! Epona

maryshome8 · Sep 20, 2006

Thanks for the advice... but where and how do I apply for such loans? Are they loans you apply for outside of the student loans you receive from filling out the FASFA? I thought that capped off at like $3500 for a second year student, and that isn't going to be enough to get me by.
I am sorry I have so many questions... I am just completely stressed out about this.
Also, I realize last night I am a bit messed up as far as financial aid & loans go. When I filled out my paperwork this year, I set it up so $ was disbursed to cover classes for Fall and Spring terms. Well, I was hoping to begin nursing school in May which would be summer term. I won't have a disbursement again until the Fall. Ugh!

You won't be able to get that much from the FASFA, what I suspect people are doing is applying for private student loans, and these are almost always at a variable rate of interest (they can change every month or every year depending on the terms)...and the payment you start off with may not be the payment you make 2, 5 years from now.

Most sub and unsub'd loans are fixed rate, THIS year, they have been variable in the past, but the amount that you can take out is limited.

Also, for anyone that reads this that is NOT a homeowner yet....if you are deliquent in your student loans, and you try to apply for an FHA loan for a VA loan for a house, you won't get it....both of these loans are insured by the federal government, so they statisitically think if you won't pay them back on one loan, you won't pay them back on another loan.

There are also rumors that fly around that all you have to do is get the payments deferred right before you apply for a loan, and the lender doesn't consider these payments....not true. If your credit report doesn't show a payment, rule of thumb we take 2% of the balance and use that as your monthly payment, and that is the payment we count against you to see if you qualify for the loan.

Think about it: If you can't afford a new loan counting in the student debt, how are you going to pay it back once the deferment period is over?

Financial aid counselors don't do their job in telling people what they need to know, and they should...that is what they are paid to do.

squirtle · Sep 20, 2006

Right now the only loans I have are through FASFA. I am in debt approx. $5000 tp student loans. I don't have any payments right now, and they aren't collecting interest as long as I am in school. I don't plan on having any off time between completing my pre-reqs and nursing school (well as long as I am accepted). I was just planning to borrow money to have as back up to help cover a few bills that I will fall short on, such as mortgage, while being employed part time as opposed to full time for those 2 years.

MB37 · Sep 20, 2006

What about the hospitals that agree to pay off your debt as kind of a signing bonus? I live in Florida now, but when I decided to go to nursing school I was still in Louisiana where I guess that is very common. Every RN/BSN I knew told me to take out any loan I could get my hands on, because chances were extremely good that I wouldn't have to pay them back. I've heard people discussing this on the boards before, so it can't just be a New Orleans thing...I wonder how common it really is though, or if what they cap the amount they'll pay back for you at...anyone know for sure? Thanks!

maryshome8 · Sep 20, 2006

While there are many hospitals that have agreements to pay off student debt, you can rest assured there are two "catches" to those contracts.

1) There will be a limit on how much in student loans it will pay off

2) If they do have a policy to where they will pay them off, regardless of amount (which I have NEVER seen), then you can bet your last dollar there is a contract that states so many $$$ per year of employment.

You have to read the fine print...ALL of the hospital employment contracts (and I have reviewed tons b/c heath care workers starting new jobs submit these in lieu of paychecks when they need to buy a home and haven't started their job yet), have a stipulation that if you QUIT or THEY FIRE YOU, a portion, or ALL of the money they have agreed to pay for you on your student loans, is null and void, and you become 100% responsible for paying it.

Never, ever assume you can't get fired from a job.

Think about it: If you have $60K in student loans and get $50K per year as a nurse, in essence, they are going to be paying you $70K per year. This can also be a henderance in you getting a job...if you were the recruiter, which would you hire? Someone with no student loans or someone where you don't have to pay anything to hire them? You'll never get this in a lump sum as a sign-on bonus.

It's all about the money.

What about the hospitals that agree to pay off your debt as kind of a signing bonus? I live in Florida now, but when I decided to go to nursing school I was still in Louisiana where I guess that is very common. Every RN/BSN I knew told me to take out any loan I could get my hands on, because chances were extremely good that I wouldn't have to pay them back. I've heard people discussing this on the boards before, so it can't just be a New Orleans thing...I wonder how common it really is though, or if what they cap the amount they'll pay back for you at...anyone know for sure? Thanks!

MB37 · Sep 20, 2006

My school is fairly inexpensive ($1600/semester plus books) so for a 4 semester program, I don't expect to borrow much more than $10,000. I owe $2000 approx from my first degree, so maybe 15 altogether by the time I'm done. I think that's reasonable. My mother's advice when borrowing is you should never borrow more for school than you expect to make in your first year out of school - otherwise you'll never get your head above water. Then by your math I'd owe $150/month, about. That's not unaffordable, I don't think. But I'm sure you're right, the people that are borrowing massive amounts to attend a private school and then not work while attending...not sure if they know what they are getting themselves into.

JoeyDog · Sep 20, 2006

My two cents: My husband and I have both been students for the past two years. He full time (he was in ADN school) and I part time during his first year and full time during his second year (working on nursing prereqs). We basically lived (and still do he doesn't have a job yet) on loans and credit cards. We are approx. 60k in debt right now, and we didn't live the high life or anything, we barely scraped by.

When he was in school borrowing money with loans and credit cards was pretty stressfull. However, we tried to see it as a means to an end and we also tried to remember that when he graduated he would be making 45k/year, and so we pushed the stress aside. Now that he has graduated all the money we borrowed has become EXTREMELY stressfull b/c banks, ect. want their money back.

After he graduated we learned an extremely important lesson that I think is not expressed enough and it is this...Everyone knows that nurses are in very high demand but what most people don't mention is that new grads really arn't (at least in our area of wa.). My husband has applied for so many jobs and has only been called for one interview (it's tomorrow actually). There are not enough residencies for all the graduates so there are many new grads competing for them. As for non residency jobs hospitals want you to have at least one year of experience, and usually it is two years. Furthermore, we learned that hospitals take a long time to even call you for an interview. My husband's interview is tomorrow and he applied a little over a month ago for the position. So I would like to let others know that just b/c nurses are in demand don't bank on walking into a job a week after you graduate like we did. Also don't expect that your hospital of choice will have a tuition rembursment (sp) plan. Our local hospital has one, but only for current employees who have gone to school while they are employed, not for new hires coming in with student loans. Good luck to you all!