Relocating Is Hard Work: Pt 3 – Unexpected Curveballs

WHAT DO YOU MEAN WE NO LONGER QUALIFY FOR STUDENT LOANS?

So as you might recall, my husband Michael is in school full time. Every semester he gets a federally backed student loan for about $5000 to cover his tuition. I’m not really worried about this. The interest rates are low (4.5%) and once we knock out our consumer debt, I’m confident we can pay off his student loans in no time.

But…

About a week ago he received an email stating that he no longer qualified for student loans. What do you mean? This must be an error. Oh yeah, and I’m in the middle of preparing for a big cross-country move.  Can things possibly line up at a more inconvenient time?

We went to the office of financial aid, and it turns out he really no longer qualifies, because he dropped that one class this past semester. Remember that? I was shocked.

When he started school in 2013, he requested and was granted “academic amnesty” which erased all his prior attempts at college from 10 years ago. This way those old classes wouldn’t affect his GPA or be on his transcript, etc.

WE ASSUMED the academic amnesty was also taken into account when qualifying for student loans. Apparently, it’s not. And therefore, the government says he hasn’t successfully completed 60% of his attempted coursework, and no longer qualifies for aid. If the amnesty were taken into account, this one withdrawn class would put him at like 97% completion rate, and everything would be fine. We didn’t know those old classes would still be considered despite having been granted academic amnesty.

If we want to appeal, we have to wait one full year.

*heart pounding*

I sure as heck don’t have an extra $10k per year to just pay for this out of pocket. I was barely going to be able to squeak by as it was. What to do?! We were sure thrown for a loop, angry and stressed.

We went out for pizzas and margaritas to think, and talk about our options. Michael’s gut was saying “screw this place, I’ll just come with you to NJ and go to school there. There’s no reason for me to stay here.” I said, okay, great, awesome. Over pizza, we looked at out of state tuition rates in NJ. Even only looking at state schools, the cheapest were like $15k per semester. And for most of them, the deadline to start in August had passed.

If somehow all of his credits transferred (unlikely), he’d still have 3 semesters left. And he’d have to sit out one before getting started. So he wouldn’t finish until May 2017 at best, and we’d have an extra $30k in debt at least. HA! no.

What to do, what to do?

It was obvious he’d have to stay and finish in New Orleans, but with what money? Okay, private student loans. The lowest rates we found were in the neighborhood of 9%, aaaaaaaand turns out they have the same policy about the amnesty and the completion rate, so he’s automatically disqualified from almost all private student loans, too.

Stressed is putting it mildly. Remember how big a decision it was for him to drop that one class? How he really didn’t want to for fear of feeling like a failure? But then he did because he was at his absolute breaking point? Well, think about how my poor love was feeling now. So much guilt and remorse, he was literally nauseus all day. I tried to soothe him, told him we’d figure it out somehow.

We stared and stared at our budget.  Called private loan place after private loan place.  Nope.  They all have that completion rate policy.  What to do?

*staring blankly at the budget*

And then an idea struck me, and I know this might be an unpopular decision, but I’m sticking to transparency here, documenting my financial journey. I’m going to take a loan out against my 401k. The good news is that the interest rate is super low (4.2%) and all the interest I pay goes back to me, into my own account. The bad news is that I’m investing less into retirement, but only for a short while.

We had to do it, couldn’t see another way.

And so we sat down with our budget, again, and went through it line by line, through the end of 2016, because that’s when he’ll graduate, can move to NJ with me, and start earning income.  That’s when things will radically shift for us.  I mean, financially.  Ha.  They’re shifting pretty radically right now.

It’s going to be fine.  We’ll be alright.