<p>Here's the wording from my D's school:
"If a student receives an outside scholarship(s), we will first reduce the student’s institutional and federal need-based loans included in her original financial aid package. If the outside scholarship(s) exceed the amount of the need-based loans, the remainder reduces the College grant. The total financial aid will remain the same unless the student requests her full federal Stafford loan eligibility rather than the loan reduction. (Important note: If the student's institutionally determined need is met solely by College need based grant any outside scholarship(s) will reduce the institutional grant aid dollar for dollar. )
The Subsidized Federal Stafford Loan will be added back to the package unless the total aid package exceeds federal need eligibility. If this occurs, a student is usually able to borrow an equivalent amount in unsubsidized federal student loan. However, to help reduce overall student loan debt students are encouraged to consider reducing their FDSL by the amount of her outside scholarship. "</p>
<p>Her Award letter includes:
COA: 57,146</p>
<p>Need-based grants: 42,846
Subsidized Perkins and Stafford Loans: 5,000
Work/study: 2,100</p>
<p>Remaining need: 7,200 (parent and student contribution)</p>
<p>Federal EFC= 6,667</p>
<p>So, in the hypothetical situation that she received 3,000 in outside scholarships, what would happen? Would it reduce the subsidized loans (but could she then still borrow that difference to help pay the remaining need portion?) </p>
<p>It's so confusing!</p>
<p>It looks like this college met your child’s full need. Here is what I think they are saying. </p>
<p>The outside scholarship would reduce your child’s aid package by $3000 in loans. So her Perkins or Direct Loan amount would be reduced by $3000. In your case, they are bot subsidized loans.</p>
<p>However, you could then request an UNSUBSIDIZED Stafford Loan. All students can take the unsubsidized Stafford Loan…up to $5500 for freshman year total.</p>
<p>The school is encouraging you to keep your loans at a minimum.</p>
<p>Hoping others weigh in!</p>
<p>Thanks. thumper. So the way you read it, she could not then take the remainder of the SUBSIDIZED loans to help pay the remaining need?</p>
<p>I realize they want her to keep loans at a minimum, but the total amount of cash our family has to put towards the “remaining need” plus another 1800 for health insurance is just 3,000. So it’s going to be borrowed any way you look at it. She was hoping that it could be subsidized!</p>
<p>No. It is actually stated that she could take an UNSUBSIDIZED loan. </p>
<p>In your case, it Is possible that $600 could be added back in as subsidized because that doesn’t exceed your federal aid eligibility. </p>
<p>ETA…YOU can pay the small amount of annual interest as it accrues…thus YOU could subsidize her loans.</p>
<p>Thank you for your help. Yes, that’s pretty correct. I called the FA office to clarify. If she gets outside scholarships, it will first replace the Perkins loan, then the next $500 can be used towards the EFC, and then anything more replaces the subsidized loans. She will not be able to take any of the subsidized loan money to help with the EFC, only unsub. But yes, I’d thought of us paying the interest for her for the 4 years. It won’t be easy, but that would be ideal. </p>
<p>This may all be moot because she might not get any scholarships, but she’s applying for several so we’ll see!</p>