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$100K in debt, 1 semester left and no cosigner in sight

Because no one is able to co-sign her student loans, Ashley Fleming, a 24-year-old college senior with one more semester left, may not be able to graduate. With close to $100,000 in student loans, and no longer allowed to take another leave of absence to work, Fleming has resorted to crowdfunding her tuition and set up a GoFundMe page to ask for help.

As a first-generation college student, from Manassas, VA, Fleming was mostly on her own when researching how to finance her education. Her parents, both retired, attempted to co-sign her loans but were denied.

“My parents supported me through the process as best they could,” says Fleming, “but they didn’t really understand, and unfortunately did not have the credit to help me out financially.”

For the first two years of school, she got enough financial aid to afford a $43,000-per-year tuition at her dream school, American University. But the aid to cover the next two years didn’t come through as expected and she’s since struggled to make it to the finish line.

Exhausting the help from her family, with her sister co-signing for one semester’s loan, Fleming took three leaves of absences from her studies to work full time and pay her tuition out of pocket. She also took out whatever private loans she could on her own. Like most schools, there are strict rules about how much leave you can take at American University, and Fleming isn’t allowed any more time off.

American University said it can’t give details on any student’s case because of privacy laws and said it “meets the full need for our students and is committed to supporting them through degree completion at AU, provided that they maintain academic and federal eligibility."

Last month, in the middle of her senior year, she learned her private loan application was denied. Now, the $23,707 she owes American University for the current semester needs to be paid off by Dec. 25 in order for Fleming to be able to enroll for her final semester.

“Since I have started my gofundme page, I have heard of about at least five other students in this situation,” says Fleming. “It’s unfortunate that I wasn’t aware of all of my options before beginning my education.” Since she started her crowdfunding effort last month, Fleming has raised over $3,000.

Fleming is just one of many students and graduates struggling to pay down mountains of loans as higher education costs continue to grow. Average tuition and fees at private 4-year colleges, for instance, rose by over 200% from 1980 to 2015, according to the College Board. About 70% of college graduates had an average of $33,000 in student debt in 2014. Yahoo Finance spoke to financial aid experts for guidance on steps you can take now to prevent getting caught in a similar situation.

Apply for financial aid as early as possible

“The absolute first thing that students and families should be doing is applying for financial aid as soon as possible,” says Justin Draeger, President of the National Association of Student Financial Aid Administrators (NASFAA).

For students entering the 2016-2017 spring semester, the deadline to fill out a Free Application for Federal Student Aid, better known as FAFSA, begins on Jan. 1. However, President Obama announced in September that for the 2017-2018 academic year, students can fill out their FAFSA starting in October.

Moving up the available date corresponds with the time that students begin to apply to schools and as a result, allows them more time to plan ahead.

Keep your debt in sync with your income

According to financial aid expert Mark Kantrowitz, if your total student debt is going to be more than your income once you graduate, you should probably look into another school.

A helpful tool that every school is required to offer is a Net Price Calculator. Even before you fill out the FAFSA, this gives you the difference between the full cost of a school minus any grants/scholarship/financial aid you might qualify for and factors in things like the student’s expected major. If you can’t find the net price on a particular school’s website, you can find an easy one on netpricecalculator.collegeboard.org.

Fleming’s dream job is to work for a nonprofit organization focused on higher education. Despite the cost, Fleming says the university helped her land great internships like the one she currently has with the Department of Commerce. “I’ve had an amazing experience at my university and I am very grateful for what they have done,” Fleming says. “I just wish that at 18 I knew exactly what I was getting myself into.”

Consider community college  

Many students want to go to their “dream” school -- which often comes with equally lofty price tags. If you can’t graduate with reasonable amount of debt, consider community college first, advises Kantrowitz.

There are about 1,132 community colleges in the U.S., according to American Associate of Community Colleges, and average tuition for one year is $3,260. That’s a huge difference compared to the average tuition for a private university -- $32,405.

For the estimated 20% to 50% of college freshmen that enter with an undecided major, the community college option can give them the chance to take a class in every area of interest.

If you do happen to find yourself in a similar situation as Fleming, here are a few tips that can help you put some money toward paying off your debt and continuing your education.  

Budget yourself

Keep track of your expenses and determine if they’re mandatory or discretionary. Things like a gym membership, a car, and cable are all discretionary expenses made with money you can be using for tuition.

Double check your federal student loan limit

If your parents are unable to borrow and you don’t have a cosigner, talk to the financial aid office at the school and ask them to allow you to borrow the higher independent limit on your federal loans. The $9,500-$12,500 limit should be available based on the fact that your parents would be denied the Parent Plus loan.

Institutional loan programs  

Ask your school if they offer any institutional loan programs for students in a financial crisis. Some schools have this option and the loan would come directly from the school.

State loan programs
Check with the higher education agency in the state where you’re going to school, and the state you reside, to see if they have any loan programs.

Scholarships

Never stop looking for scholarships. If you’re a first-generation college student like Fleming, sites like imfirst.org/scholarship and firstgenerationstudent.com can help you with your search.

Fleming hopes she can come up with $25,000 by Christmas in order to remove the hold on her account and sign up for her final semester.

“Looking back on it now, I would’ve definitely looked into community college,” she says, “Even though I think I would've always chosen to come to AU, I wish I would've known all my options and maybe I would be done with school by now.”

This story was updated on December 22, 2015 with American University's response.


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