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Question for the Money Doctors

Question submitted on Dec 23, 2012.


I plan on transferring to a college in PA in Sept.2013. But I cannot become an official student until I transfer over my official transcript. The only thing is, I owe my old school $5,000 and I have no credit history and my cosigner has a credit score that the bank won''t accept so I cannot get a school loan to pay it off. The bank/credit union says the only way I can get a loan is if I apply for a car loan. But that seems really unwise. Are there any other options?


Establish contact with someone in the admissions office of the new school and let them know your situation. Often, a school will accept unofficial academic records (typically available on your past school’s website) on the condition that you provide official transcripts prior to registration. You now have 8-9 months to pay off the $5000 owed to school #1.

Your next step should be to contact the student accounts, or bursar’s office at the school to which you owe the debt. They can tailor a payment plan specifically to help you repay the balance before September. Reaching an agreement directly with the school will also prevent the debt from being sent to a collection agency. An agency will not only assess interest and fees, but will hinder communications between you and the school, possibly delaying release of your records.

Once you have the details in place with each school, you will need to find a source of income to make the payments. With no credit and no co-signer, your options are extremely limited. There are credit cards available for your financial situation - Citi, Capital One, and Discover all have student options – but it is highly unlikely that you would receive a credit limit of $5000, and interest rates will be very high. I suggest you obtain the money the old-fashioned way: earned wages through employment or your own business. You may need to get a second job if you are already working. $5000 may be a large amount of money for you, but you have roughly 32 weeks before school begins. Even a part-time job earning $10/hour for 20 hours a week would be more than sufficient to pay back your balance, and then you can begin the fall semester debt-free.

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