<p>Most colleges calculate an Expected Family Contribution (EFC), which is the amount of money the student and his parents are supposed to be able to pay. If the family lacks liquid assets or excess income, they are expected to use loans to pay the EFC.</p>
<p>If the EFC is lower than the total cost to attend the school, a financial aid package may be offered. Schools that "meet 100% of need" will offer an aid package equal to the difference between the cost and EFC. With a few exceptions, colleges will include loans as part of the financial aid package. Are these really loans really financial aid, or do they belong on the family side of the ledger?</p>
<p>Well, they aren't nothing, because typically, interest does not accumulate until after graduation. But really, the only thing I can consider financial aid would be grants and scholarships and federal work-studies. Saying, "They're giving me _____ in financial aid" is a little useless when half of it is going to be returned, like any other loan.</p>
<p>subsidized loans to the student yes
there are ways to get those taken care of after graduation- teach for america etc.
Loans to parents after the EFC are not aid.</p>
<p>I'd question what percent of subsidized loans are really aid. Their terms might be a little more generous than a commercial loan, but both the principal and some amount of interest must be paid back. I'd view them more like promotional car loans - a slightly below commercial interest rate, but hardly a gift.</p>
<p>"I'd view them more like promotional car loans - a slightly below commercial interest rate, but hardly a gift."</p>
<p>Further, especially if they are not guaranteed and/or the interest rate fluctuates with 'credit worthiness'</p>
<p>Viewed in that light they are exactly like those comeon auto incentives that are subject to great variance upon review of each individual application.</p>
<p>Nope, if I have to pay it back later, then it is not really aid, at least it is not reducing my actual cost, only delaying the inevitable. Like refinancing your mortgage to interest only, it may make things more comfortable in the present time, but the time will come when you must find the resources to pay the piper. In comparing schools packages, I subtracted all loans. A lovely private school gave my D a $100k scholarship, super! But they still gave me an EFC of $20k annually PLUS part of their aid included loans....that was simply not a good package. If I COULD afford the $20k by accessing my valuable home equity, it would really be a nasty reward at the end of university to add the student loans to the equity loan. </p>
<p>I firmly disagree that loans meet aid. I got a lot of PLUS loans that were supposed to meet need and I thought it was absolutely ridiculous. If it's federal loans, maybe I would count it up to the loan limits but besides that, it doesn't help at all. I think it's very manipulative and unclear for colleges to say they meet aid with PLUS loans and things like that because its obviously not the truth. Colleges need to be upfront about their financial aid giving and not pretend to meet need when they don't.</p>
<p>I agree, how can PLUS loans be considered aid when your parents have to start paying them back during your college career. Its deceptive, and hardly appreciated.</p>
<p>Loans are not financial aid. They are still debt that are put on the student along with whatever loans are taken out to meet the unreasonable EFC. My "Financial Aid" included almost 6k in loans and then they expected me to pay an additional 12k. My family cannt write a check for 12k so those would be loans as well. So Emory left me with 18k to pay, not 11k.</p>
<p>Also, it is a little ridiculous that if I get a job to pay for the EFC this year it will be used against me for next year's EFC. I am trying to pay off THIS years and they are going to look at that as more income that I can afford to pay toward college. It is so annoying!</p>
<p>I look at loans as being on the "family" side of the ledger in comparing awards -- though I welcome them as part of the budgeting tool. It certainly helps to defer payment -- but its no different than buying a house or a car. No one is giving me anything by an offer to spread the payments over time, especially when they are charging interest. </p>
<p>I put all college aid awards on a spread sheet where lump all grants & scholarships together, with loans in a separate category. I also list the out-of-pocket cost for each school, plus total-cost-of-attendance. Total CUA is the cost with only grant substracted out. Then I put these all on a bar chart where I can easily compare each element.</p>
<p>loans freak me out... even with a full tuition scholarship im still going to be taking about 20k of loans out with about 12k of those accumulating interest while im in school</p>
<p>My D will graduate with about 15K in subsidized loans.
If she participates in a program that has as an incentive reduction of the loans- like teach for america that could substansialy reduce her debt- her CityYear position, likewise will reduce her debt about $5K.
So about $5K-10K of low interest loans to procure a private college education? From our standpoint, that isn't bad, because without it, it wouldn't have been attainable.</p>
<p>I'm going to be around $35,000 in loans when I get out of school. My parents couldn't afford to send me, so I had no other choice. I've contemplated leaving school because of the massive debt I'm going to be in, but it's pretty much a Catch-22. I honestly don't think loans are a form of financial aid at all.</p>
<p>Well I've been given 28k per year in loans and the cost of education is 32k. This is hardly financial aid especially when you consider that the repayment of the loans begin as soon as I enter college. And my parents efc was 11k.</p>
<p>I voted "no" but then being the control freak I am, checked my Merriam-Webster and lo & behold; a loan to pay for school may very well be considered "aid"</p>
<p>'To provide with what is useful or necessary in achieving an end.'</p>