<p>I'm an incoming freshman and I'm trying to figure out how much money I'll have this year. The school says they are swamped with paperwork and it'll be another 2-3 weeks before I get my fin. aid award letter. In the meantime I'm going crazy waiting. I think they'll probably offer me the max amount of loans anyway, with some subsidized, because my EFC is below 1000. but if they don't, can I take out $5500 in Stafford loans even if all of it is unsubsidized and the school didn't offer it? I haven't been able to find a definitive answer anywhere. I keep reading that the max subsidized is $3500 and I wasn't sure if that meant you could only take out $2000 unsubsidized, or if you could do more.</p>
<p>The combined maximum Stafford limit for a freshman is $5500, so you can generally take all of that in whatever combination of sub/unsub the school will certify you for.</p>
<p>Can’t OP receive more UNSUB loans + the $5500 if OP’s parents’ PLUS loans are denied?</p>
<p>If the school will certify it he may be eligible for up to $4K in added unsub Staffords if the parents are denied PLUS loans…but the OP didn’t say any Plus loans were in the works and hopefully the aid package will be sufficient to avoid $9K in debt for one year! Perkins loans would be a much better choice, if the school offers them.</p>
<p>I saw a situation where a graduate is more than $50K in debt. I was sure that outside loans had to be involved. They were not. The kid was able to take out the maximum including that $4k when parents are denied PLUS. That, with the fact that most of the loans were unsubsidized meant that they were accumulating interest each year. That adds up to a lot of money.</p>
<p>My son was going to take out unsubsidized Staffords last year. When he realized that they would accumulate more than 6% interest during the year, he was horrified. That meant he would owe about $300 in interest for the year. $300 to him is a lot of money. To just have to pay that for what he saw as nothing, really grated his sensibilities. We did explain how it could make sense, but he chose to pay out of his summer earnings which was banked and he had hoped to draw on that amount over the year for things. He had less money in the bank, (like nearly none) but he was $300 richer at the end of the process. He worked about 12 hours a week and replenished what he paid as well as covering other expenses. The way he looked at it, the interest was a month’s pay that just went into a hole. </p>
<p>It is possible with Perkins, STaffords, state loans, school offered loans, a kid can owe a huge amount when he graduates. That doesn’t include any outside loans, PLUS, HELOCs that may have been taken out on his/her behalf.</p>
<p>I don’t know what the last comment has to do with my situation. I’m not an independent student and I can’t accumulate 50k worth of Stafford loans in my undergraduate career. I can’t get any PLUS loans because my parent won’t do it for me. I want the max Stafford amount this year because I have to move over an hour away for college (there isn’t one anywhere closer), have no financial support from my family and want some loan money to help me get established and give me space to find a job.</p>
<p>Well, technically it’s possible for undergrads to rack up over $50K in Stafford loan debt though we hope that won’t apply to you. Dependent students whose parents are denied a Parent Plus loan are eligible to borrow an additional $4K per year over the “normal” limits of $5500/6500/7500 and the aggregate max for them is $57,500.</p>
<p>It certainly can happen to you. The kid I know needed the funds, parents applied for PLUS, were denied so the kid got an additional $4K in Staffords, bringing up the total to $9500 just in that first year. And that doesn’t count any Perkins loans or loans that the college offeres. I see now that Sk8rmom has addressed this above ands shows that the aggregate max for Stafford debt alone is $57.5K.</p>
<p>The only way you would NOT be eligible for the full $5500 (in whatever combination of sub & unsub it would end up being) would be if your total aid exceeded your cost of attendance. Otherwise, you would get the full $5500 (split between the two semesters).</p>
<p>Boy, DS was undergraduate from 2004-2008 (9 semesters total).
He took maximum Staffords for that time period and graduated with less than $19,000 in loans. That is not that long ago…how did Stafford limits get so crazy so fast??</p>
<p>In 0809, the base award for each grade level was increased by $2000. That took the dependent limit from $23,000 to $31,000 & the independent limit was also increased by $8000 to $57,500. I suspect it will be raised again in the not so distant future.</p>
<p>It’s crazy and scary. A friend of my son’s wants to take out the max STaffords this year and thinks that he will qualify for the PLUS rejection supplement. If he does this, he will accumulate about $700 in interest charges just for the year. Now $700 is a lot of money for these kids. To just accumulate it for one year is really a big deal. That’s without putting a dime in towards repaying the loan. Do it for another year and you are talking over $2200 in interest at graduation slapped onto the $24K of principal borrowed. And this is just for two years. The kids is loan free up to now.</p>
<p>Someone taking out the maximum Staffords and Perkins will owe over $60K including interest accumulated by the time s/he graduates over 4 years, taking maximum loan amounts including the PLUS additions. Also since only some of the interest is subsidized, there is going to be thousands of dollars of accumulated interest. </p>
<p>And there are kids out there looking for outside loans in ADDITION to this debt burden.</p>
<p>Well, I don’t plan on taking the max EVERY year, just this year. </p>
<p>I’m wondering what happens if I take out more loans than I need, because I don’t know exactly how much money I need. It really depends on whether I get a job quickly. If I get more loans disbursed than I end up needing, can I pay that money back towards my loan balance? If I leave it in a bank account for next year, does it count as assets on the FAFSA?</p>
<p>You can return the funds to the lender, but I recommend returning loan money through the school … because if you find that you do need more money later in the term, you can get it back. If you return it to the lender & you have borrowed the max for the year through the school, you won’t be able to borrow more. This happened to my nephew recently. He had borrowed his max but returned some because he didn’t need it all. He returned it through the school in January. In April, he was out of money due to unforeseen expenses. He went to the financial aid office & completed a loan revision form, essentially re-borrowing the money he had returned. Had he sent it back to the lender directly, he would not have been able to re-borrow & would have been out of luck.</p>
<p>I don’t recommend keeping unsub money in the bank … the interest rate is 6.8%. You are not going to make that much in interest on your bank account, so you would be losing money. </p>
<p>Any money you have in your bank account on the day you sign your FAFSA does need to be reported. How it affects you depends on a number of factors, so it’s not easy to say how much it affects the aid you will receive.</p>
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<p>kelsmom, does this apply to a Plus Loan, or only Stafford and/or Perkins Loans?</p>
<p>There is no annual cap on PLUS, so it won’t matter in terms of annual limits if the loan is repaid through the lender. But if the student returns PLUS funds then needs more & had borrowed PLUS to COA - he won’t be able to get any more for the year. Perkins is repaid to the school, anyway (it’s govt funding given to the school to lend). The reason I recommend repaying the excess through the school for Staffords is due to the annual cap. Say a freshman student borrows $5500 but decides to repay $2000. He sends it to the lender. Then his car breaks down. He can’t borrow any more Stafford for the year because he has borrowed his annual max. If he had returned it to the school to return to the lender, he could borrow the $2000 if need be.</p>
<p>His lifetime limit would be reduced by the amount returned directly to the lender - just not the annual limit.</p>
<p>Kelsmom, thank you for explaining this. This is just good information to have on hand!</p>
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<p>But, the FAFSA instructions for student asset reporting (line 41) specifically exclude proceeds of student financial aid. Stafford loans are considered financial aid, aren’t they? I don’t think they can require reporting of loans after considering them financial aid!</p>
<p>While that is true, be prepared to prove that the money in the account is actually from student aid, if requested.</p>
<p>That shouldn’t be too difficult…I was thinking of the students who receive FA refunds because they live off campus or have enough aid that it covers unbilled expenses and then file FAFSA in January when that money is still sitting in their accounts!</p>