Those who used SLM Loans

[surreal1221]

For those who got a SLM loan for any amount to attend Falcon. . . did SLM give you the cash, or did they put said amount of loan into an account under Falcon's ownership?

I'm dead set on not letting my money sit in a school bank account, far too many bad things have happened at other schools for me to have any faith in any school keeping hold of my money.

Just want to see how it worked for those who did it at Falcon.

[Champcar]

The only way I have seen that you get your loans in Cash is through the UVSC online program. At my school SLM sends the money to the school to keep, UVSC the money goes to them then to you.

[surreal1221]

Interesting. SLM has a monopoly on the career training loan market.

[Sprint100]

SLM sends the money straight to the school. Then if you don't like the school and decide to leave, the school has to send it back to SLM minus whatever termination fee they might have.

[Champcar]

In all honesty its better that way. You can't trust a 19 year old with a 40k check.

[Tim]

Originally Posted by surreal1221

For those who got a SLM loan for any amount to attend Falcon. . . did SLM give you the cash, or did they put said amount of loan into an account under Falcon's ownership?

I'm dead set on not letting my money sit in a school bank account, far too many bad things have happened at other schools for me to have any faith in any school keeping hold of my money.

Just want to see how it worked for those who did it at Falcon.

When I was at ATA SLM sent it straight to the school. I think the school though is only suppose to draw what you need for a certain program. ATA screwed many of us by taking it all at once. They drew my stage 2 money about 2 months before I was starting it. ATA did refund my money to them but only after I had a lawyer contact them. I have had nothing but good dealings with SLM though.

[surreal1221]

That's encouraging to hear Tim.


Champcar,

Yes, a 19 year old with a 40k check is something to be cautious about.

But a 22 year old, married, veteran, home owning, with a 25k check is not something to be cautious of. . . not when too many schools have taken advantage of students by "holding" the student's cash. The student is the one who needs to be concerned and cautious. Not the loan provider. Who is the one getting screwed here? Not the loan provider.

I'm just concerned, and just looking out for my investment.

[TexasFlyer]

Interesting thread.

I know I'll be in charge of my cash when I enter a program. I figure if SLM does not want to loan me $40K - $50K based on my six figure income history, an over 800 credit score, $40K or more of my hard earned money in liquid savings, home ownership history, and being debt free while owning a 2006 Harley and Toyota truck outright; they have no clue how to lend money on the basis of knowing a low risk borrower versus a high risk borrower. If SLM does not like that, there are many other institutions that would be glad to lend me the cash with such a track record and make it on my terms.

SLM is the "easy way" since they have the flight school market, but if you have a good history behind you there are many other ways to get the money at a very favorable rate (and on your terms). So I would not be to worried and only focus on SLM. Maybe you won't be able to defer the interest while in school if it's not with SLM, but you can find a competitive rate or even slightly better one if you have a good history.

Of course all this will only apply to professional career changers since in no way would a newbie out of High School or someone who has not proven themself with a strong borrowing and income history be in the drivers seat when borrowing money.

I'll be curious to see what SLM thinks when I go calling them in the summer and expect the check sent to me directly since I manage my own money and will not allow anyone else to try to manage my money (I'm more qualified than any flight school to manage my money unless you show me a flight school staffed by both CPAs and CFPs - Certified Financial Planners and Certified Public Accountants). Then I'll let the school hang onto a reasonable deposit and I'll add extra money for projected flying on a bi-weekly basis to ensure the account is always fully funded. And if the flight school does not like that option, there are many others who would be glad to have me and my money.

I'll not very concerned. I'll sure it'll all work out just fine and on terms I can live with that will protect me from being screwed over, the bank so they know the money will be repaid timely, and the school since they'll be seeing a consistent check from me.

By the way, $40K over a 12 month program is a $20K average bank balance in your account over that time; not exactly but close enough for this example. At a guarenteed 5% rate of return on that money with a Capital One, Fidelity, Emigrants, or simialr bank account you would make about $1,000 of interest on that money over that year (20000x.05). Even if the program was completed in just 6 months; you'd still make about $500 on that money. Why let the school screw you out of your interest earned on the money you borrowed and that you are personally responsible for paying back to the bank? Just a little extra to think about (sorry, it's that accountant in me since accounting is my college degree and was my first career before falling into the headhunter gig).

[surreal1221]

I'm going to end up calling Falcon this morning when I get home and see what it is they do. If I don't like the answer, I'll start looking at other avenues to get 25k.

In regards to dererment, I don't plan on doing any such thing and highly suggest to others to stay away from such a practice at all costs.

[surreal1221]

As far as SLM. . . I called Falcon today, and sure enough, they (SLM) put the funds into an account, and Falcon draws from it to pay for my training. I'll be calling SLM about this tomorrow before I head into work in the evening to find out what sort of options are available to me. . . at least with dealing with them. I very well may be in search of a new loan provider, either through a bank (if I can find one that offers such a loan), or credit union (once again, if I can find one that will loan such an amount). I also want further clarification if said account is in SLM name, or in the flight schools name. If it's in the flight school's name, I'll have some issues, but if it is an independent account that Falcon draws from and doesn't own directly I'll be a bit more understanding.

[TexasFlyer]

Keep me posted on this one. I have other options but I'd prefer to do SLM, but only if that check comes direct to me for me to have complete control over the account; after all it is my money which I am 100% responsible for.

[surreal1221]

Exactly. I'll let you know what I find out. May be a couple days, have to work this weekend starting tomorrow evening . . . or . . . well, later today (Thurs eve).

[TexasFlyer]

Hey, how did that SLM conversation turn out?

Will they dispurse the money to you so you can pay Falcon as you go? Or is the only option for them to give it to Falcon for Falcon to handle?

Just curious since I looked into my other option. The other option I have is to pay as I go with my own money that I secure from credit. I was able to secure offers from two different credit cards I have. ONe will advance up to $50,000at 2.9% fixed rate for the life of the balance with only a $75 fee. The other will do the same but at 3.9% fixed rate for the life of the balance with no transaction fee.

I done this once before back in 2002 to survive post 911 when my business went flat and I got into a bad situation on cash flow. I ended up paying off the whole thing when my business recovered in just over 3 years. So it works great and has no hidden charges. It is just a luxury what good credit and a good income track record gets you. So I am sure by the time I get to Falcon in the Fall the rate will still be somewhere under 3-5% since I don't see the FED changing much on rates over the next 6-10 months. The best part of this is that my savings account I have with a NY bank pays me 5.05% interest. So it's pretty much interest free money for me for life!

So if you have great credit with strong Platnium or Black cards, don't overlook that as an option outside of SLM since SLM will be more expensive on rate by a good 5%; which is substantially more expensive. The only reason I would go with SLM at a higher rate is that the SLM type loan of that amount looks better on your credit report than revolving credit card balances. A $50K revolving credit card balance will hurt a credit report long term even when paying timely. A $50K SLM loan will have minimal impact on a credit report over the long term. So in the long run, SLM would be more beneficial even though more expensive by quite a bit (about $150/month more expensive if broken out over the same payment terms... which amounts to $18,000 more over that term in interest!). The important thing to do though is once the time arrives and you look at all variables, you can then decide what works best for your personal situation now and over the long term by doing a cost-benefit analysis using all relevant variables.

[killbilly]

Originally Posted by TexasFlyer

The only reason I would go with SLM at a higher rate is that the SLM type loan of that amount looks better on your credit report than revolving credit card balances. A $50K revolving credit card balance will hurt a credit report long term even when paying timely. A $50K SLM loan will have minimal impact on a credit report over the long term. So in the long run, SLM would be more beneficial...

Yes and no. Both are unsecured debt instruments and are treated similarly by FICO, even though they have drastically different uses. As long as the student loans are current, they look okay to FICO.

FICO likes to see vast amounts of revolving, unsecured credit lines (50K credit card, for example) but the catch is that they want to see it UNUSED, or at very, very low utilization. Like 15-20%.

The new scoring system (Vantage, I think) is supposed to portray a more 'accurate' picture of the borrower.

[TexasFlyer]

KillBilly, you are correct. It'll be interesting to see what route I pick since it'll come down to the long term cost-benefit analysis. If those card offers still stand in the Fall, more than likely that'll be the route I pick since interest free money for life is always the way to go. That's just as good as borrowing from family, but if anything happens your family in this case will still love you and not be all

[killbilly]

Originally Posted by TexasFlyer

KillBilly, you are correct. It'll be interesting to see what route I pick since it'll come down to the long term cost-benefit analysis. If those card offers still stand in the Fall, more than likely that'll be the route I pick since interest free money for life is always the way to go. That's just as good as borrowing from family, but if anything happens your family in this case will still love you and not be all

I'd never considered an option like that, but due to some immaturity/stupidity in my past I don't have those kinds of scores to do it anyway. Getting better though.

Is there any fine print in those loan offers that says they can jack you at any time up to the 28% max? I know they can do that if you're late, even a day late - just wondering how a big a sword they'd hold over your head if something went...well...wrong.

[TexasFlyer]

Yes, they'll sink you quick if you are late or miss a payment. But I never been late on a payment, ever. And online payments ensure everything is done timely. So no worries there.