Can I get student loans while my chapter 7 is pending?

[lezlovin]

I filed pro se at the end of march (chapter 7). Currently, im living and supporting my child on student loans. I am suppose to be getting some loans for summer (which im depneding on seriously), I heard two different things from many different people:

1. Its a federal law you cannot barrow student loans while bankruptcy is pending

and
2. Its a federal guaranteed loan. it is non dischargable. you are not in default, so its a non issue.

which is it? I need to know NOW so i can start my job search for wendy's me and my child will be out in the cold. Thanks

[justbroke]

You should not be applying for any type of credit while your bankruptcy case is pending (active), or at least not discharged. There is no per se rule for Chapter 7s, but having the discharge may help your rate.

As for whether federal aid is available to people in a pending bankruptcy, I don't know.

[lezlovin]

justbroke - thanks for replying For future people who read this, I found out teh answer today. It turns out its a form of "financial aid" . It is up to the school. The government will still guarantee it (unless your in default on any laons), and then it is up to your school. In my case, the school said they just have to do a "manual override" and ill be fine.

[justbroke]

I'm glad that they are able to override that part. I hope you get a good rate.

[lezlovin]

Me too!! thanks

[lezlovin]

update: well they said it wouldn't affect it but a federal hold keeps popping up on my student account at the college. The fin aid lady said it is ok. Now the loan adminstrator is contacting someone to find out why the hold is popping up. she will let me know if its an issue, but she said it SHOULDN'T be. I assume she'd know (being the college's loan adminstrator and all). i will update this thread with the final result in case it helps someone else.

[Exployer1234]

I am battling with my school that I am supposed to attend in the fall. The loan adminstrator agreed for pell grants, but loans to cover the remaining balance is out of the question. I keep explaining all I want is additional money ( 500 per semester) to cover the difference. I am hoping they can override this decision to cover the expense.

[HHM]

With due respect, why are you saddling yourself with student loan debt?

That is the same "easy out" thinking about affording education that gets people into other financial trouble. Since when did we decide that we should not SAVE UP for an education like we should save for other things.

[justbroke]

Since when did we decide that we should not SAVE UP for an education like we should save for other things.

Since they started handing out Student Loans like they did vaccinations in the 1970s. I think the non-dischargeability part in Title 11 may be contributing to the "free-money" mentality and high tuition.

[Brazzy]

In some situations despite being in deferment or not being past due a bankruptcy filing cant be considered default of the student loan contract. Per OCC guidelines under this situation a student loan is to be charged off. With a charged off student loan on your credit report they will not give student loans. Its a bad situation and it sucks but it has happened before. Its all in the fine print of the company that funds the loan and the servicer of that loan.

[Exployer1234]

I know for myself I have 2 years left to finish my BA. Once I have been teaching for 5 years the school system provides a program to pay off any existing loans. They also pay for your Masters. I personally don't have time to save up for an additional 12,000 dollars. I waited until I was in my 30's to go back to school.

Just my two cents on why I had to do additional loans. I am not sure why others do it.

[Goldfish]

Thanks you guys so much for this thread. I eagerly read it. For three reasons.

But I should tell you first that I saw (Tues. night?) Frontline about the entire "for-profit" college/university sector.

I was interested in the discussion for 3 reasons:
1. Would it be good for me to take a student loan now.
2. Might I teach on-line in one of these 'for-profit' campuses.
3. Might I start my own 'for-profit' campus.

From what I have learned from that show, one must be very diligent about signing up for any (federally funded) student loans. There were these poor students who thought that after racking up all this debt, that they would get a, e.g. nursing position. All they had in the end was say $122K of debt and no job. The marketers are only trying to get you enrolled, regardless of future financial debt. It was pathetic.


But some of these schools serve purposes which regular community colleges apparently cannot handle. So, there might be room for them.

Because I have to be concerned about my own un-employment, I do think of whether it would be WISE to register for something or other, and take a student loan.

I zeroed out my previous student loan. And I know those are non-disachargeable. It is simply unforgiveable to coerce someone into $122K of debt on student loans and then -- beyond that-- not have a job.

Just current thoughts. gf

[Exployer1234]

I think people should only accept the loan amount to cover the difference that grants and various other "free" funds do not cover. If someone is above the means of income to support grants then they can normally save to pay for school. The reason people get in to trouble with student loans is that they take out way more then they need to have extra money. In some cases they take 5-10k extra money per semester. It is a good methos to only take the correct amount off and have it forwarded to the school and any additional funds should only be used for books.

Here is an example:
Cost of tution is 6000 per semester.
Pell grants 2500 per semester.
Cost of books 500 per semester.
Additional funds needed is: 4000 per semster.

Now that would only be 32K to pay back not the huge amount of 122k.
Also there are schools out there that cost less that are just as great.

[HHM]

Shop around for schools.

My graduate degree cost me less for the entire time than ONE year of undergrad and I went to a top 30 graduate school in my field.

[tigergem]

I'm wondering about the wisdom of the strategy of taking out more student loan amount than one needs, and investing it in some... perhaps tax deferred vehicle or CD... for the purpose of having the excess on hand to facilitate or assist repayment of the student loan itself if the student's future income turns out to be not quite what they expected it to be once payment comes due. Would this help at all to deflect some of the difficulties borrowers have experienced? Granted, it would only serve to delay, perhaps the inevitable.

But say (hypothetically) if a student requires a loan amount of $12,000 for tuition, books etc., and the student borrows $24,000... banks $12,000 of the loan amount...(and seriously doesn't touch it, which is where this theory probably enters the realm of fantasy)...then has that money to fall back on when/if repayment becomes a tight spot...

Would that be a good idea or a bad idea? Thoughts?