Archive for December, 2008

When I was younger, I absolutely destroyed my credit. I got two student credit cards in my first year of school and it all went downhill from there. My parents hadn’t taught me about credit and honestly, my money management in general was just terrible. Since my parents couldn’t help me with school, paying for it was always very difficult.

Since I ruined my credit, I had a hard time qualifying for anything. Trust me when I tell you that trying to run your finances with a 450 credit score is a quite interesting challenge. The worst part is getting denied for credit – the embarrassment will get to anyone. I honestly didn’t think student loans were even a remote possibility.

School is now over for me and I have started correcting my credit. I actually now have a credit score over 700. Since I’m somewhat interested in going to grad school, I have been looking into student loans. The funny thing is that I now realize that I could have taken out loans all along.

The United States government created Stafford loans to help almost everyone to be able to get an education. Even if your credit is poor, the government will sign for you with the bank. They would definitely come after you if you defaulted on the loan, but the possibility opens up a lot of doors for people with poor credit.

If you think about the economics behind this program, it actually makes a lot of sense. If the government can increase your ability to earn, you will pay more taxes later in life. They may take a hit on some defaults now but will make more in the future. This is why they’re willing to basically sign with you on your student loan.

Qualifying for Stafford loans is actually quite simple. First, you will need to be a citizen of the United States that is 18 years old. Yes, minors can go to college. However, they can not legally get loans without a cosigner.

If you have a default on a student loan from the past, it will become quite difficult to get Stafford loans. Your only option at that point will be to pay off the defaulted loan. If you’ve never defaulted, chances are you’ll be approved without any problem.

Student loans would have helped me immensely while I was in college. I wasted tons of times trying to pay for school and in the end, it cost me a few years. Getting loans could have really sped up my process.