1. Focus on Reducing Reliance on Loans:
* Maximize Grants and Scholarships: This is the best option. Encourage her to aggressively apply for federal grants (like FAFSA), state grants, and scholarships from colleges, organizations, and private companies. Many scholarships are overlooked, so thorough research is key.
* Work-Study Programs: Explore work-study options at the college. This allows her to earn money while attending school.
* Summer Jobs/Part-Time Employment: Working during summers and part-time during the school year will help fund her education.
* Community College Transfer: Starting at a less expensive community college for the first two years can significantly reduce overall costs before transferring to a four-year university.
2. Explore Alternative Loan Options (Proceed with Caution):
* Federal Student Loans (Direct Subsidized/Unsubsidized Loans): These are generally the most favorable loans for students, even without a co-signer. However, she will need to complete the FAFSA application and demonstrate financial need. The interest rates are typically lower than private loans.
* Private Student Loans: These are very difficult to obtain without a co-signer with good credit. However, some lenders *might* consider her application based on factors other than co-signer credit, like her academic performance, future earning potential, or having a strong relationship with a non-co-signing guarantor (a trusted adult who isn't a co-signer, who agrees to help if she can't repay). It's unlikely she'll qualify without a strong co-signer, but it's worth exploring if other options fail. Expect high interest rates.
* Parent PLUS Loans (if parents are willing and eligible despite poor credit): Parent PLUS loans are federal loans taken out by the parent. Even with poor credit, parents can often still qualify, but they'll likely pay higher interest rates and may be required to go through a credit counseling program. This is a risky option if the parents' finances are already strained.
3. Address the Parental Credit Issues:
* Credit Repair: If the parents are willing, they should work on improving their credit scores. This takes time, but it's the most effective long-term solution for future borrowing. They should check their credit reports for errors and work on paying down debt responsibly.
Important Considerations:
* Loan Terms and Interest Rates: Carefully compare interest rates, fees, and repayment terms before accepting any loan. High interest rates can significantly increase the overall cost of the education.
* Financial Literacy: It's crucial for your daughter (and parents) to understand personal finance, budgeting, and responsible debt management.
Recommendation: The first step is to complete the FAFSA to determine eligibility for federal grants and loans. Then, aggressively pursue scholarships and work opportunities to minimize the need for loans. If loans are unavoidable, prioritize federal loans over private loans whenever possible. Consider delaying college or attending a less expensive institution if necessary. Finally, carefully evaluate the risks associated with any loan before signing on the dotted line.