Parents with bad credit

[Vvandenn]

Hello guys. This question has most likely been answered here before, however I cannot find the answer when searching through the threads. Alright, a little background info: I am 18 and an entering freshman. My parents do not have a college degree (dad doesn't even have a high school diploma) and therefore our family only brings in around $60,000 annually. However, there are 5 people in the family to support AND my parents are in severe debt; they haven't paid their taxes in god knows how long. Filing for bankruptcy, tax liens, etc...we can't pay for a thing. And when I say that, I honestly mean that. We have trouble paying for food and don't even mention bills. I am barely getting by with enough money from loans this year (since we got denied PLUS loans because of our credit). Thankfully I am working 52+ hours a week during the summer to save up a nestegg of cash to help with things throughout my freshman year.

The question is: when I enter medical school I will be considered an independent correct? I have searched through several med. school's financial pages and some schools will not consider you an independent until you are a certain age or otherwise. Take Yale for example:

For financial aid purposes, Yale does not consider a student to be independent simply by virtue of the fact that the student has not been supported by his/her parents. Independent status at Yale depends on the student's age at matriculation (registration day). Students who are not 29 years old at matriculation must provide parental information, including the Need Access Supplemental Information for both student and parents, as well as for the student's spouse, if applicable.

This leads me to believe that I will not be able to get enough loans. To be blunt, my parents credit is so incredibly horrible that we were denied many large loans that most people are able to receive for undergraduate school. I am afraid this is going to happen in medical school too. All I want is to be indepedent from them; their financial state already dictated where I ended up in college and I don't want it to happen again in medical school. I want to finally move out of Texas and go to an out of state school if at all possible.

On the bright side, my credit is perfect. Regardless, will my parents mistakes dictate how much I can receive in loans for medical school? Thank you for your time.

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[ShyRem]

I don't think so. I believe you should be allowed the full stafford loans for med students of $38.5K/yr and then you should also be able to get the GradPLUS loan. I don't *think* that one is credit based - but do some research on this. It may also change by the time you are ready for med school. Also, you should have a leg up getting into school and have some scholarship money available (depending on where you go) due to the fact your parents don't have a college education. I think that may put you as "disadvantaged" with your dad not even graduating high school. Someone correct me if I'm wrong here, but I recall questions along those lines.

Good luck to you.

 

[mshheaddoc]

The question is: when I enter medical school I will be considered an independent correct? I have searched through several med. school's financial pages and some schools will not consider you an independent until you are a certain age or otherwise. Take Yale for example:

For financial aid purposes, Yale does not consider a student to be independent simply by virtue of the fact that the student has not been supported by his/her parents. Independent status at Yale depends on the student's age at matriculation (registration day). Students who are not 29 years old at matriculation must provide parental information, including the Need Access Supplemental Information for both student and parents, as well as for the student's spouse, if applicable.

This leads me to believe that I will not be able to get enough loans. To be blunt, my parents credit is so incredibly horrible that we were denied many large loans that most people are able to receive for undergraduate school. I am afraid this is going to happen in medical school too. All I want is to be indepedent from them;

You are not an independant if they claim you on their tax return and most likely you won't be considered for med school. Actually their low income would 'help' you get loans I would think. As for their credit, I could see how most loans that require guarantors would decline you. For med school you most likely won't need a guarantor. My husband was claimed by his parents up to last year year and went to med school straight from college. I believe, although not positive, all his loans (including private) were signed by him soley. Although his financial aid package was based on his family at first.

 

[Vvandenn]

Thanks guys, I really appreciate it.

 

[Kubed]

When you are applying to med school you are independent by virtue of your FAFSA. There's a question that asks if you will be working towards a graduate or professional degree. Answering "yes" to that means you don't need to include any family information on your FAFSA or fin aid paper work. This applies to federal loans. However when it comes to private loans from the school, they can ask for anything they want.

Like the others said though, I bet your family will be will end up helping you out when it comes to scholarships.

 

[Doctor Bagel]

As mentioned above, you will be considered independent for federal aid if you're a graduate student. Also, your parents' income will likely help you in getting institutional aid. As long as your credit is good, you shouldn't have trouble securing private or GradPlus loans for additional school funding if you need to borrow beyond the $38,500 stafford cap. So no, your parents' bad credit shouldn't stop you from attending medical school. Just be sure to keep your credit clear.

 

[Vvandenn]

This makes me so happy, you guys have no idea. Thank you so much for the replies!

 

[scpod]

As long as your credit is good, you shouldn't have trouble securing private or GradPlus loans for additional school funding if you need to borrow beyond the $38,500 stafford cap...

One last caveat, though: It's possible that you could be denied a private loan by some lenders, not because you have bad credit, but because you haven't established any credit at all. However, the new version of PLUS loans (which don't require a parent) have a lot easier credit criteria than most private loans. Also, never forget the power of a co-signer in case you are denied a loan. There are a gazillion ways to finance a medical education, but since you are only eighteen, I'd try to forget about that for a while and concentrate on enjoying the next four years of college. The loans will be there when you need them.

 

[mshheaddoc]

BUT if you want to establish credit now, a credit card might do the trick. Use it every month and pay it off every month. If you need to buy a car and make payments (which might be harder without a cosigner at a young age ) on it will help too.

 

[mohelgamal]

I have studied medicine outside the states. And I am surprized about the hardship you get through in the states to get good education. in any place in the civilized world intelligent people are considered a national fortune that the state should invest by giving them free education. there is absolutly no point in wasting a hard working young mans life in doing trivial jobs.

I do salute your great effort and hope this mad situation would end someday. I wish you the best of luck