Like many other incoming freshman, Bethany Tabor from Whittier, Calif., was excited to start her first year at Biola. She spent the summer preparing for dorm life, and even got to chat with her future roommate. Then, less than three weeks before move-in day, her parents told her they couldn’t cosign her loan.

“It was a no-brainer that I wanted to go to Biola,” said Tabor, who had wanted to come since second grade and was crushed after hearing the news.

Tabor’s financial aid was not enough to cover tuition and living expenses for the year. In order to come to Biola, she would have to take out a private student loan. Since Tabor has five younger siblings, it was too much of a risk for her parents to cosign. Tabor, who is going to try to attend next year, isn’t alone among students unable to find a cosigner.

The startling number of closing banks, along with heightening unemployment rates, have greatly affected students. Students are required to find more money for tuition, with a lower chance of success. This is linked to the fact that over 100 banks have failed since the start of 2009, according to the Federal Deposit Insurance Corporation.

“With the downfall of the economy, lenders are tightening their criteria,” said Emilee Hidy, assistant director of Financial Aid. “Cosigners need better credit to qualify.” 

According to Biola’s Financial Aid Office, lenders look not only at cosigners’ credit scores, but also their debt to income ratio. With parents getting laid off, or having to face other unexpected difficulties, the gap between the ratio increases. The discouraging state of the economy is causing each party to be more cautious. Not only are banks less willing to loan money out, but parents are less willing to take out a big loan. Hidy said the economy is the main indicator of the projected decrease in enrollment for this school year.

Some may be uncertain as to how cosigning a loan works. Most college students do not have a long-standing credit history in the first place. For this reason, students are more likely to need a cosigner in order to take out a loan. Banks look at statistics and it is a risk to lend money to someone with little or no credit history. If for any reason the borrower (student) is unable to pay the loan back, the cosigner assumes full responsibility. Having a cosigner ensures that even if the student misses a payment, the loans will be repaid somehow. However, even if someone was able to cosign for a student for a previous school year, they might not qualify as a cosigner this year. So, students are forced to turn to other options, including withdrawing from Biola. 

Kira Rigdon, former student at Biola about to finish her fourth and final year, had to deal with this situation. Rigdon, who transferred to Biola in spring 2009, was excited to pursue a degree in intercultural studies.  

“God clearly put me at Biola, otherwise I never would have gone in the first place,” she said. 

However, Rigdon was unable to come back this fall because she couldn’t find a cosigner. After applying for a private loan with her parents and brother as cosigners, she was denied both requests. By that time it was too late to find another one. Rigdon is currently taking classes at a community college so she doesn’t yet have to pay back her student loans. Rigdon said she is trying to be open to what God is teaching her through the process.  

“I would love to return, but I want to be obedient to what God wants me to do.”
The process of finding a cosigner can be very discouraging and, in some cases, be in vain.  

“Think outside the box,” Hidy encouraged students. “Cosigners do not have to be related to you. I’ve seen close friends and youth pastors cosign.” 

It’s always worth a shot to try again with someone else if denied with one cosigner. This would not affect the students’ financial aid. However, asking anyone to cosign is always a delicate subject.

“It’s hard enough finding one person to ask,” said D.J. Crawford, a financial aid counselor of. “It’s something people usually don’t want to talk about. It’s a very personal issue, for both parties.”

Biola recognizes that finding a cosigner (and finding financial aid in general) can be an obstacle for many students. Biola has taken great measures to help as much as possible. Hidy shared that departments have been asked to make cutbacks to their budget, including hours and spending. 

“If we spend less as an office, we save more as a university,” she said. 

The Financial Aid Office offers some advice on how to correctly approach this situation for future school years. Crawford advises students to fill out their FAFSA forms earlier next year. Though students have been told this repeatedly, he urged students to realize that there are not unlimited funds. Sometimes even those who qualify may not receive money if they don’t file early enough.

“Students should really be on top of the FAFSA,” Crawford said. “Treat it like a class.” 

More information about cosigning and the FAFSA can be found at www.fafsa.ed.gov, or in the Financial Aid Office.