Cut Off for Subsidized Stafford Loan?

<p>Hello,</p>

<p>I have been searching but have not been able to find an answer to this in the archives.</p>

<p>I am wondering if there is an "approximate" EFC or need level where a student would get a subsidized vs unsubsidized stafford loan? I am asking this for both myself and a friend who are trying to look ahead at budgeting payments etc.</p>

<p>For example, our EFC looks like it is going to be about 8K, and our friends about 2K. If both kids went to say a 20K school, would either of us qualify for a subsidized stafford, and also I assume that we would be ineligable for a Pell Grant but would they with only a 2K EFC? </p>

<p>Does this "cut off point" vary by school, or is a goverment set point?</p>

<p>Thanks</p>

<p>djd</p>

<p>The cut-off point is determined by a student's need. Need is typically determined by Cost of Attendance minus other aid received minus EFC. Depending on the actual COA, a person with an 8k EFC could be eligible for subsidized stafford loans. However, they could also have no eligibility for subsidized loans.</p>

<p>The formula is as follows:</p>

<p>Cost of Attendance
(-) EFC
(-) Other sources of financial aid (grants, scholarships, work-study, etc)</p>

<hr>

<p>= Remaining Need</p>

<p>If you have need you qualify for a subsidized Stafford loan up to the amount of need, or $3500 for the first year in college, whichever is less. In other words, if you have $2000 of Remaining Need you could get a $2000 subsidized loan -- if you have $10,000 of need, the maximum loan is $3500.</p>

<p>Thanks for the replies. </p>

<p>So do you mean that if we show a "need" - example 20K COA - 10k EFC = 10K "need" - that we automatically qualify for a subsidized stafford? If so, are the individual schools limited in the amount of dollars available for this, or is it backed by the govorment to be able to cover all students with need? If there isin't enough to cover all students with "need" I assume those with the largest "need" at each school would be first in line for the subsidized stafford?</p>

<p>Are there other loans such as Perkins that are based the same way of demonstrating need?</p>

<p>Thanks,</p>

<p>djd</p>

<p>At my Ds school they give the max work study award (for her it was $3400) before awarding any loans. At her school WS can be converted to a subsidized Stafford loan as long as you are not already maxed out on the loan allowed for the year. I do not know if this apples to all schools.
Perkins loans are limited and the school receives only a certain amount of funding so they go to those with 'exceptional financial need'. Not everyone with need will get Perkins as there are not enough $$ to go round.</p>