Going back to school during Chapter 13.

[bela0813]

Hi,

My husband and I are currently on the Chapter 13 since last February. On the begin of October he started a new job and will be making more money, so the Trustee will have to readjust (increase) our payment amount.

I was thinking about going back to school, this would be a 2 years program in a Community College. The reason that I want to do this now, is because my daughter is 3 years old, so when I finish my associate degree would be the time for her to start a full day Kindergarten, and I could get a job.

My question is, would the courts allow me to pay for my classes, or if not, would they allow me to take a federal student loan? The increase pay on my husband’s new job is about $20K and my expenses for the Community College going full time would be around $2K a year. I do think that I will be able to get some Special Population Grant to help me pay for, in this case the amount to be paid would be even less.

Thanks!!

[newbie2]

Hi,

My husband and I are currently on the Chapter 13 since last February. On the begin of October he started a new job and will be making more money, so the Trustee will have to readjust (increase) our payment amount.

I was thinking about going back to school, this would be a 2 years program in a Community College. The reason that I want to do this now, is because my daughter is 3 years old, so when I finish my associate degree would be the time for her to start a full day Kindergarten, and I could get a job.

My question is, would the courts allow me to pay for my classes, or if not, would they allow me to take a federal student loan? The increase pay on my husband’s new job is about $20K and my expenses for the Community College going full time would be around $2K a year. I do think that I will be able to get some Special Population Grant to help me pay for, in this case the amount to be paid would be even less.

Thanks!!

I think it is doubtful that this would be allowed as an expense. The Michigan trustees and judges are pretty strict when it comes to paying all of the DMI in to the plan for the unsecured creditors. Unless you are already in a 100% plan, expect to not have it allowed. However, when your husbands new income is re-evaluated make darned sure that you are also accounting for an increase in expenses since your time of filing. You may be able to squeak out that less than $200 per month in tuition by budgeting carefully. Good luck to you!

[Nanzee]

I am in a Master's program. I worked with the financial-aid department, they were very helpful. Being in a Chapter 13 did not mean I was ineligible for student loans. If you want to finance it on your own, I am sure you will find a way by cutting back in other areas. Good luck to you!

[bela0813]

Thanks for the answers.
Can I fill out the FAFSA application, or do I need permission to do this? The only way that I can apply for the Special Population grant is if I receive the denial or acceptance letter from the FAFSA.
Thanks again!

[hopenpray]

Can anyone answer this thread?

I filed ch13 in the middle of my schooling. I have already filled out the fasfa, and been approved for loans for fall. I really need the loans to finish schooling, but what is the likelihood that the trustee will approve this? My plan has been confirmed, but I am just nervous that asking for loans will cause my case to be reopened or rehashed or something. Is this just crazy paranoid, or is it normal to be allowed to take student loans in bk? If I wait, I will have a three year discontinuity in school, during which time I may lose some class credits because they are aging. If I get the loans, I will graduate about the same time that my bk is discharged in 3 yrs.

advice?

[newbie2]

Can anyone answer this thread?

I filed ch13 in the middle of my schooling. I have already filled out the fasfa, and been approved for loans for fall. I really need the loans to finish schooling, but what is the likelihood that the trustee will approve this? My plan has been confirmed, but I am just nervous that asking for loans will cause my case to be reopened or rehashed or something. Is this just crazy paranoid, or is it normal to be allowed to take student loans in bk? If I wait, I will have a three year discontinuity in school, during which time I may lose some class credits because they are aging. If I get the loans, I will graduate about the same time that my bk is discharged in 3 yrs.

advice?

You have to talk to your attorney. In a Chapter 13 you are not supposed to take on any new debt (over $1000 in most districts). Even though this student loan wouldn't have to be paid back until your case was over, you should still ask your attorney about it. The last thing you want is for your case to be dismissed because you did something you shouldn't. Good luck.

[papie]

I'm always late to the party. lol

The first thing you need to do is talk to your attorney and see what your trustee's guidelines are for things like this. I was told by my attorney that student loans are very easy to get approved by the trustee, within reason of course. Actually, my attorney told me to go ahead and apply for my Stafford loans and if the school asks for written permission from the trustee, then I can send him a letter asking permission, if he doesn't, good for me. My trustee is really lax though (super lax compared to stories I've read about the trustees on this board.) I did a lot of research before I decided to go back to school though, and everything said that federal student loans are generally allowed in a Chapter 13.

This is the process for getting federal SL's, grants, etc:

-apply to you school of choice

-fill out the FAFSA at fafsa.gov

-the FAFSA will generate a report telling you what kind of aid you are eligible for and they will also send this information to your school of choice

-after you are accepted to your school, they'll set you up with an online program where you can login and see what aid has been offered to you. More than likely, if you're still in your first four years of college, the MINIMUM you will qualify for is something like a ~$2500/semester Stafford loan. You don't have to take all of that though. You can log onto your school's website and "accept" or "decline" the award and specify the amount you want to take out. This varies slightly by school, so if you have any questions call the financial aid office at your college. (If you aren't sure how much you'll need, you can always accept the full amount then immediately pay back the remaining when the extra is refunded to you.)

-a few days later you can go to studentloans.gov and fill out your loan documents online

I filled out my loan documents today.....so I'll come back and update and let you all know if trustee permission is requested, etc. If anyone cares. lol

[chapter13]

papie, I want to know what happened. Please elaborate.