bad credit
we have a lot of students with bad credit when they come into the school and don't qualify for private loans, is there anything we can do to help them improve their credit while they are here?
In Module 1, we discussed offering Life Skills classes to your students. The basics of credit and budgeting can be covered in these classes or workshops. Above all, encourage students to pay their bills on time and to communicate with their creditors whenever they anticipate financial difficulties.
In the "Downloadable Forms" section of this course, we have provided a "Managing My Budget" worksheet which you can offer to students as a great starting point.
Donnie,
One of the things we do at our school is offer the students a chance to do in-house financing while they are attending class. In some cases, we require a higher deposit and the class must be paid in full by the time they complete class and it must be paid in full in order for them to receive their completion certificates.
I would make sure the private lenders that you are sending them to allow a cosigner on the loan, then encourage the students to find someone to cosign. I've found that almost anyone can get approved for a loan with the right cosigner(s).
The idea of a teeaching course to help them focus might be especially helpful to all students in these economically trying times
Teaching the borrower to successfully manage their budget is extremely important. This life skill does not come naturally to many people so offering them the tools for success is in everyones best interest.
Sometimes people continue to have bad credit because they do not know where to turn or who to ask. One of the things we offer is financial planning workshops. Workshops on how to cut costs, how to save money while in college, how to repair credit and how to budget.
Emphasizing the importance of good credit and reaching just one student from these workshops makes it worth it.
I think it is great that you offer these workshops to your students. Learning to budget and understand your finances from the start instills great habits that will follow you through life.
Once you get into financial trouble it can be hard to ask for help so being proactive and giving your students the tools they need to be successful gives them a great advantage.
Most students want to improve their credit score and we stress the importance of repaying their Federal Student Loans as a means of improving their credit scores. We also let them know if they default on their loans it effects their credit score and makes clean-up of their score very difficult.
Florence,
It's a good strategy to connect student loan repayment with credit scores, since the scores are such an important part of future financial success. I find that when I tell students how damaging a low credit score can be and how negatively student loan delinquency and default can affect the score they realize just how serious student loan repayment is to their futures. At the same time I emphasize that there is absolutely no reason to let student loans ruin your credit when there are so many repayment alternatives available.
Diana Mateer
As a smaller proprietary school, we do see a lot of students with little to no credit as well as borderline awful credit. One of the things that we offer is a loan called an In House Loan - it's a private loan through our company and it's been incredible in giving our students a "second chance" by helping them to cover the costs that they cannot afford to come back to school and allows them a second chance to begin rebuilding their credit. We spend a lot of time coaching and teaching our students how to budget so they are successful.
Ashley,
Learning to live within a budget can be very difficult for some people to understand. Too often you see students who have large private loans in addition to their federal loans and they are not given the tools to understand and budget these payments into their personal finances. I think it's great that you are spending the time to help them fully understand and be successful.
Cheryl Kesson
Ashley,
Learning to live within a budget can be very difficult for some people to understand. Too often you see students who have large private loans in addition to their federal loans and they are not given the tools to understand and budget these payments into their personal finances. I think it's great that you are spending the time to help them fully understand and be successful.
Cheryl Kesson
I suspect that the coaching that you provide to students with financial and credit challenges is especially appreciated by those who do not receive much in the way of mentoring or assistance from their families.
I was one of those young students living on my own and making terrible choices. Student loans, credit cards, private loans – I made every mistake possible and because the colleges I attended offered canned online entrance and exit counseling, I was never challenged to think more critically about my choices or more realistically about my loan balances. My first few years after grace ended would have gone more smoothly if I had met with FA a few times to discuss my growing obligations.
