<p>We talked to our local bank regarding a student loan...son qualifies for Stafford Unsubsidized...they told us to go on to the bank website to apply. Between son's savings account, our help financially, and scholarships that may yet come we are unsure how much extra he will need. We don't know if the $5500 is what we HAVE to borrow, or we can borrow only what he needs to pay for the expected expenses? Also he has received a letter of acceptance for scholarships his school has offered and there is a place to put the Lender of our choice. Turns out our local bank is NOT a preferred lender for his school and the application will probably be paper instead of online IF we go that route. Is May 1st the deadline to accept the admission (already done) or is the paperwork to accept scholarships also May 1st? The girl at our bank said they can usually offer better rates than the school will on loans, but if all the Stafford Unsub loans are 6.8% how could that be right? From what I see on the school website, the preferred lenders seem to all have the same offers. We are considering Key Bank or Suntrust if not our local bank. My DH doesn't trust Citibank or Wachovia due to their economic bailout status.</p>
<p>I am so confused on what to do...can anyone help?</p>
<p>Not sure I can answer all your questions, but I can take a whack at some of them:</p>
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<li><p>Usually, when a school tells you your Stafford Loan amount ($5,500 is the max amount allowed to freshmen), they’re telling you the most you CAN borrow, not that you HAVE TO borrow that much. Of course, if you don’t borrow that much, you may have to find some other way to pay what you owe the school.</p></li>
<li><p>What exactly that May 1 deadline means (deadline for scholarships? for loans? for everything?!) will vary from school to school. Don’t ask your school’s financial aid office “What is May 1 a deadline for?”. Ask them, “Is May 1 the deadline to submit the loan applications to the school? Is it the deadline to submit the loan applications to the bank?” Always ask specific questions, and get the name of the person who answers the question for you. If it sounds like they don’t really know and are making something up, don’t be afraid to ask if there’s a “counselor” (code for “supervisor”) you can speak to.</p></li>
<li><p>Due to changes in the student loan industry regulations over the last few years, most lenders on a school’s preferred lender list will indeed be offering nearly identical benefits on federal student loans like the Stafford and the PLUS. And yes, the interest rate for Stafford loans is regulated. You should definitely ask the girl at your bank how she can offer a better interest rate than what the school offers. It might be that your bank has some arrangement for their customers by which they pay a portion of the interest, so that the interest the customer has to pay is lower. Or, it’s possible that the girl didn’t understand what you were asking and gave you a wrong answer. Maybe she was talking about a private loan instead of a Stafford Loan. </p></li>
<li><p>In your shoes, I’d go back to the school’s financial aid office and ask them whether you can use your own bank even though it’s not on the school’s preferred lender list. If it turns out that your bank really can offer you a lower interest rate, somehow, than the school’s preferred lenders, make sure you tell the financial aid office that. :)</p></li>
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<p>Best of luck to you. I know this is a really terrifying process, and it’s hard to know who to trust–your own bank that you’ve been going to forever, or a financial aid office employee you’ve just met! Sometimes, though, the school financial aid officers really are the only people who know what the rules are for your specific school.</p>