College Loans

[jomw10]

Federal student loans qualifications are basic, you must be accepted to an accredited university, enroll at least half-time, register for selective service (male only!), citizen or eligible noncitizen (student visa, green card). There are no financial qualifications. Base on your need, some of your federal loan may be subsidized, the rest will be unsubsidized.
For a first year dependent student the max combination for subsidized/unsubsidized loan is $5,500.
If your son needs more than $5,500, then he will need either cash, scholarships or a parent loan.

[r_u_sharp_2]

One of the best things you can do to qualify for federal programs is sit down with the financial aid administrator / counselor and carefully review what is reported that impacts EFC. Financial aid need = EFC less the Cost of Attendance. The greater the need, the more aid you qualify for.

I slightly disagree with what was said about everyone qualifies for loans. That is not entirely or wholly true. Maybe for lower cost and smaller institutions, but not for bigger places.

Everything on the FAFSA inpacts EFC. The financial aid office isnt going to review it line by line with you. They get a record of what the student input into the FAFSA which has the EFC and the dependency status. I can say that the big 3 that play a roll in EFC are... AGI from the tax return, household size and # of household members in school. Even the estimators that are online are not accurate. However, even the age of a parent can impact the EFC. Why and how much... I couldnt calculate that exactly.

Federal loans under the Stafford Program are not need based aid. Only in cases where the EFC of a student is too high, will the student not be able to use the Subsidized portion. They will however, be able to use their entire eligibility as Unsubsidized loans( up to yearly and aggregate limits)

Institution size won't matter. What matters if if the institution is accredited and able to use Federal Aid. Anyone can do a FAFSA and find out what their EFC is and what they would qualify for in Federal Pell Grant and Federal Stafford Loans. You do not need to put a federal school code in to complete a FAFSA, only if you want the results sent to the school(s) of your choice.

Would a bigger place be A&M? They list Federal Direct Loans under "Types of Aid" on their website. Havard lists them as well.

Needing to use them might be a different story due to scholarships/grants available from Federal Aid, the school or an outside source.

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[Dusty Britches]

Subsidized loans are a need based aid and the sum of need based aid cannot exceed need. If your EFC exceeds need, you do not qualify for subsidized loans.

This is from the DOE SFA Handbook, Volume 3, Chapter 5. It has not changed in many (20+) years.

The specific Direct Loan amount that a student or parent borrower is eligible to receive is determined based on various factors such as the student’s cost of attendance (COA), expected family contribution (EFC), other estimated financial assistance (EFA), and remaining eligibility under the annual and aggregate loan limits. Some of these factors are relevant only when determining eligibility for certain types of Direct Loans.

Direct Subsidized Loans and Direct Unsubsidized Loans have annual and aggregate limits that are the same for all students at a given grade level and dependency status. You may not originate a Direct Loan for an amount that:

• Exceeds the amount requested by the borrower;
  
• In the case of a Direct Subsidized Loan, exceeds the student’s COA minus the student’s EFC and EFA;
  
• In the case of a Direct Unsubsidized Loan or Direct PLUS Loan, exceeds the student’s COA minus EFA; or
  
• In the case of a Direct Subsidized Loan or Direct Unsubsidized Loan, would cause the student to exceed the annual or aggregate limit.

Not everyone qualifies for these loans.

[Dusty Britches]

OP - I was trying to remember the name of the web site for searching private lenders - try

https://www.elmselect.com/v4/

[r_u_sharp_2]

Subsidized loans are a need based aid and the sum of need based aid cannot exceed need. If your EFC exceeds need, you do not qualify for subsidized loans.



This is from the DOE SFA Handbook, Volume 3, Chapter 5. It has not changed in many (20+) years.







Not everyone qualifies for these loans.

So does the student still qualify for federal loans? Yup, Unsubsidized portion only.

Pretty sure I laid that out in my first post. When I wrote the following 2 points.

1. Everyone qualifies for federal loans.

2. You might not qualify for Pell grant or Stafford Subsidized, but the student would then be eligible for Unsubsidized loans at the depdendent level.



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[Dusty Britches]

Not according to V3, Ch5. Not everyone qualifies. The institution cannot initiate a Direct Unsubsidized Loan that exceeds the student's cost of attendance less the expected financial assistance. This is not the EFC (expected family contribution).

[AZST_bowhunter]

Have on in college and another one starts next month. School me on the best company for the parents portion of college student loans. Any of them low or no interest? The feds say we don't qualify for their loan.



Had what I thought was an "interest deferred" loan through Discover but turns out it accumulated almost $5000 in interest last year. Appreciate any leads.

Put everything in your kids name, she will qualify for pell grants (free, no repayment and the better she does in school she may get a higher amount after a couple semesters) and then she will qualify for both loans through FASFA and they are interest free until she stops going to school and repayment doesnt have to start for 6 months until her last class. You can still pay them and help her, it will just assure she qualifys for loans, some parents make to much and I can only imagine how much it costs to put two kids through college. I used pell and unsub/sub loans for what my GI bill wouldnt cover. Best of luck!

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[Shane]

Please talk to your kids about their choice of major and degree plan along with the earning potential that their chosen path will lead to while you're also talking about student loan debt. Colleges are great at selling tuition to students on borrowed money, but they almost never lead the student through a conversation and thought process about what financial life is going to look like 4 years later when the kid graduates with a pile of debt. If they will have strong earnings potential that will allow them to comfortably pay off the loans in 5 years or less, great. If they will only be able to afford to make minimum payments for 20+ years after graduation, then maybe borrowing all that money for that particular degree program isn't the smartest thing to do.

[r_u_sharp_2]

Not according to V3, Ch5. Not everyone qualifies. The institution cannot initiate a Direct Unsubsidized Loan that exceeds the student's cost of attendance less the expected financial assistance. This is not the EFC (expected family contribution).

Not true. The student qualified for loans. The institution is able to award them due to other financial assistance(usually grants/scholarships)

So if cost of Attendance is 50k, and the student gets a 50k in scholarships/grants.. you can not award loans.

Once again... nothing to do with the qualification for loans.

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[Mike D]

Please talk to your kids about their choice of major and degree plan along with the earning potential that their chosen path will lead to while you're also talking about student loan debt. Colleges are great at selling tuition to students on borrowed money, but they almost never lead the student through a conversation and thought process about what financial life is going to look like 4 years later when the kid graduates with a pile of debt. If they will have strong earnings potential that will allow them to comfortably pay off the loans in 5 years or less, great. If they will only be able to afford to make minimum payments for 20+ years after graduation, then maybe borrowing all that money for that particular degree program isn't the smartest thing to do.

This is spot on and CANNOT be stressed enough.

There’s a degree for just about anything you can imagine. Very few of them are a good return on your investment of $$ and time.


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[TexasCanesFan]

Put everything in your kids name, she will qualify for pell grants (free, no repayment and the better she does in school she may get a higher amount after a couple semesters) and then she will qualify for both loans through FASFA and they are interest free until she stops going to school and repayment doesnt have to start for 6 months until her last class. You can still pay them and help her, it will just assure she qualifys for loans, some parents make to much and I can only imagine how much it costs to put two kids through college. I used pell and unsub/sub loans for what my GI bill wouldnt cover. Best of luck!

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This was our plan.

[1riot1ranger]

This is spot on and CANNOT be stressed enough.

There’s a degree for just about anything you can imagine. Very few of them are a good return on your investment of $$ and time.


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Please talk to your kids about their choice of major and degree plan along with the earning potential that their chosen path will lead to while you're also talking about student loan debt. Colleges are great at selling tuition to students on borrowed money, but they almost never lead the student through a conversation and thought process about what financial life is going to look like 4 years later when the kid graduates with a pile of debt. If they will have strong earnings potential that will allow them to comfortably pay off the loans in 5 years or less, great. If they will only be able to afford to make minimum payments for 20+ years after graduation, then maybe borrowing all that money for that particular degree program isn't the smartest thing to do.

^^^ These things can be stressed too much! Make sure they are working on an employable degree program. Also, re-think traditional college routes; look into online courses for some classes and consider a local college or jr. college where your student can live at home and avoid the dorm/living costs. Be sure that online classes are transferrable. I've put five kids through college and they each chose a different path for financial aid and employable degree programs (business, engineering, and education.)

[nemclean]

Interesting discussion

[Budman68]

So I'm a little confused. Parents portion of the student loan? If you didn't save for their college, then why are going to go in debt to put them thru now? I still don't understand the logic of going in debt to put a child thru school. Send them to community college and once they finish that, then off to a major university. That gives you two years to save enough to help them to complete their degree.

You raised your children 18 plus years. Why does everyone feel like they owe their children a $100K degree. It's crazy how everyone gets sucked up in this student loan scam.

BTW - I worked thru school and paid every cent of it on my own. I drove a crap car and didn't eat half the time, just so I could pay tuition. Do I blame my parents, heck no.