New pharmacy schools: no regional accreditation = no federal loans

IBU

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Apr 30, 2008
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Just remember, you were warned:

Student loans turn into crushing burden for unwary borrowers

Some who think they are getting a federal loan find out later that they hold a private loan. The difference can be costly

Natalie Hickey left her small hometown in Ohio six years ago and aimed her beat-up Dodge Intrepid for the West Coast. Four years later, she realized a long-held dream and graduated with a bachelor's degree in photography from Brooks Institute in Santa Barbara.

She also picked up $140,000 in student debt, some of it at interest rates as high as 18%. Her monthly payments are roughly $1,700, more than her rent and car payment combined.

"I don't have all this debt because I was buying stuff," said Hickey, who now lives in Texas. "I was just trying to pay tuition, living on ramen noodles and doing everything as cheaply as I could."

Hickey got caught in an increasingly common trap in the nation's $85-billion student loan market. She borrowed heavily, presuming that all her debt was part of the federal student loan program.

But most of the money she borrowed was actually in private loans, the fastest-growing segment of the student loan market. Private loans have no relation to the federal loan program, with one exception: In many cases, they are offered by the same for-profit companies that provide federally funded student loans.

As a result, some students who think they are getting a federal loan find out later that they hold a private loan. The difference can be costly.

Whereas federally guaranteed loans have fixed interest rates, currently either 6% or 6.8%, private loans are more like credit card debt. Interest rates aren't fixed and often run 15% or more, not counting fees.

You can read more here: http://www.latimes.com/business/la-fi-collegedebt27-2008dec27,0,4636992.column
 

xscpx

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Oct 21, 2008
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Yeah, it's terrible. And it can happen to anyone. When my husband was in culinary school the financial aid worker flat out lied to him saying he would receive a Stafford loan. Lo and behold, most of the loan was indeed Stafford, but due to some discrepancy in the fine print he wound up with a 6 grand private loan. We are now paying back 22k on that 6. Please everyone, make sure to read every single word in your loan documents before you sign. Better yet, have someone you trust with you to read it as well!
 

pharmacyanalyst

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Mar 14, 2007
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I just have to say that anyone who racks up $140K for an undergrad photography degree isn't that smart anyway.
It sucks but if you don't qualify for federal loans to cover the entire amount, sometimes you gotta do what you've gotta do. I know I will be taking out private loans either way.
 
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evilolive

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Jan 1, 2006
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I'm thinking of switching from federal loans to private loans because the interest rates will be cheaper if my parents cosign them. Anyone have any information on this? I've done some preliminary research from the government's website, but I was wondering if anyone in the same predicament has any input.
 

sakigt

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Apr 19, 2006
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140k for a Bachelors?....in PHOTOGRAPHY?

I mean, really. What are people thinking? :eek:
 

triumphbr

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Mar 22, 2007
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140k for a Bachelors?....in PHOTOGRAPHY?

I mean, really. What are people thinking? :eek:
Hey that Bach. in photog-ing will earn her a cool 40k per year. It's called planning people. Obviously she "gets" it. Take a lesson...... :rolleyes:
 

sakigt

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Apr 19, 2006
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Hey that Bach. in photog-ing will earn her a cool 40k per year. It's called planning people. Obviously she "gets" it. Take a lesson...... :rolleyes:
Well at least I get why my wedding photography was so much. :laugh:
 

evilolive

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Jan 1, 2006
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140k for a Bachelors?....in PHOTOGRAPHY?

I mean, really. What are people thinking? :eek:
I almost paid that much for a music degree :)
 

diastole

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Jul 12, 2008
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I'm thinking of switching from federal loans to private loans because the interest rates will be cheaper if my parents cosign them. Anyone have any information on this? I've done some preliminary research from the government's website, but I was wondering if anyone in the same predicament has any input.
I can't answer your specific question but if you switch from the government loans to a private lender make sure that the new rate is fixed. If it is not, you may get an attractive rate now but then they can raise it later and you will end up paying more. Also watch out for origination fees and make sure you have the terms of that loan in writing before you agree to anything.
 
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