As a minor with bankrupt parents, how will financial aid and college loans work?

I'm 17 and I'll be 18 in December, and my parents just went bankrupt this past month. I'm going to college this fall, and my financial aid based on my parents' pre-bankruptcy FAFSA information will pay for most of my first year. If they fill out the FAFSA post-bankruptcy for next year will I likely qualify for more/less/same financial aid? If i have to apply for loans for the coming years, how will it work? Will they be able to co-sign them with their financial status? Will I be able to apply on my own if I'm only 18?

Federal loans will require no cosigner so you don't have to worry about that. Dependent freshman can borrow up to 5,500 a year max in federal Stafford loans. Dependent sophomores 6,500 max. Jr's and Srs 7,500 a year max (each year). Choose a school cheaper than this and you will be fine. Your parents can opt to get a federal PLUS loan (in their name) that they repay. This is based on credit, so if they are denied, you will be eligible to borrow additional money in federal student loans if they are denied.

Them filing for bankruptcy will not effect the amount or if you are eligible to get any kind of state or federal GRANTS. This is because these forms of financial aid are based strictly on your and your parents income and assets. No debt like in Bankruptcy is considered. The system does not reward folks for having shaky money management skills or those who live beyond their means... (willingly or unwillingly).

However, if your parent has recently been laid off from their job, you may have a chance of applying for "Unusual Circumstances" at your schools fin aid office. If they were laid off, and you can prove it, then by all means follow their instructions to see if you can get their income levels adjusted to accurately reflect the current situation.

You can get federal loans under the age of 18 as long as you have or will be graduated from high school by the time you start college. Age makes no difference. Private loans are another story however. Without being 18, you have no chance of entering into that loan contract. Also, with a private student loan you will also have to have a credit worthy cosigner. I doubt your folks would fit into that category, they can certainly try. But private loans are evil anyway and should be avoided at all costs. Freshman and Sophomores should never borrow unless they absolutely have too. (Certainly not a private loan).

Because their are plenty of schools you can attend for UNDER the 5,500 a year (half in the fall and half in the spring) you can get in federal loans. The first two years is when most folks drop out of school. You never know what is going to happen and you certainly don't want to be a college drop out with 20K in federal and private student loans and no way to repay.

Although the FAFSA uses your parents information it's just a base to see how much government aid you qualify for. All loans are going to be in your name anyway unless they were to take out a private loan of there own. In the next aid year you will most likely receive more loans probably unsubsidized. Usually no if your parents have filled for bankruptcy they will not be allowed to cosign but by default they will have to allow you to apply for the loan because you have no other resource. I wish you to the best of luck and I hope I was helpful.

If your parents Bankruptcy was based upon a reduction in their income from the prior year, you really should notify the financial aid office at your college and request a professional judgment decision based on their new income amounts. Once you have submitted evidence of the reduced income from the prior year, the financial aid staff can adjust your FAFSA based upon the new income information, and this may reduce your EFC which in turn, may qualify you for Pell Grant or other aid. It is worth the time and effort required to get this done.

Unsubsidized loans won't matter about yoru parents status now or then

However, you should request a professional judgement so you can be taken into consideration now. That might get you qualifed for pell and subsidized loans.

As for private loans, you can forget it.

Well not necessarily because FAFSA takes tax information from the previous year...so that would mean you would not get as much. However, next year you might.

Start working hun. With this economy you're lucky if you get any financial aid! Wish you luck in college and beyond!

Hope this helps.

http://financialaid.freehostia.com/

Thanks.

Just relax bro, it will all work out some day.