<p>We completed a fafsa last year and our efc was over 40k. My son got zero fin aid which should not have surprised me, but it did. We decided to use our HELOC to help us pay for year 1 and I have been making monthly payments on this loan.</p>
<p>Is there any benefit or need for us to complete fafsa for year 2? I do not know if there is any actual requirements for this or not. My son received an email from his school with the link to complete this years forms so I am not sure if I should have him complete or not.</p>
<p>Thanks for any info or comments would be appreciated.</p>
<p>Some parents want their children to take out Stafford/Direct student loans in their own names so that they have some “skin in the game” and might take their education more seriously. You would have to file FAFSA for your child to be eligible for those loans.</p>
<p>Since you did apply the first year and got nothing you don’t have to file again if you don’t want to.</p>
<p>if at some point you want your child to take a student loan, you can file FAFSA later. To just get a loan, you can apply quite late…even after the school year has started.</p>
<p>I hear you socaldad1 on the 8%. Interesting that you can one can get a HELOC in teh 3% to 4% range and that loan can be discharged in a bankrupcy. Stafford loans can’t be discharged, you child is on the hook for life. So why the higher rate?</p>
<p>Think of this hypothetical situation. Homeowner established a Home Equity Line of Credit several years ago (when they had some equity). Now after the real estate crash they are underwater on their loan, but the HELOC is still in force. They max out the HELOC, use the $ to pay junior’s tuition. Then they lose their job and wind up filing bankruptcy.</p>
<p>vs. Same set of circumstances but they took out PLUS loans, paid a higher rate and are on the hook for life (in addition to having to live with the problems that come from filing bankruptcy). </p>
<p>Just saying, given the power of the government to come after you for life these loans should be considered more secure than even a collateral secured loan. </p>
<p>I think the current rates are 6.8% for Stafford and 7.9% for PLUS</p>
<p>my Heloc is currently 2.74% (variable), but I have used it in the past for a car and the rate has yet to go above 2.8 over the last 5 years. I can write off the interest, but had to laugh when I saw on I paid less than $400 interest last year on this loan.</p>
<p>And that, my friends, is the real number one thing the feds could do about the college debt balloon - stop BEING the predator in terms of SLN interest
There should be a law that student loans are term fixed at prime plus one.</p>
