Demonstrated Financial Need???

Paying for College
1

<p>When a scholarship says that one of its critera is "demonstrated financial need"
does that mean you have to be low-income or can anyone who has filled out the Fafsa and is eligible for federal oans get it? I'm confused.</p>

2

<p>Everyone who fills out the FAFSA is eligible for federal Stafford loans…even the HIGHEST wage earners. If a scholarship says you have to have financial need, that means that your EFC per FAFSA is not very high and certainly not high enough to pay for college.</p>

3

<p>It’s probable that “demonstrated financial need” means that your family EFC is below the COA. It could mean that there is a gap between the COA and the EFC + Staffords + any other federal aid the college should allocated. The short answer is if you family EFC shows you can afford the cost of the college/uni out of pocket and perhaps with Staffords you would probably not be considered for his scholarship. But certainly ask the college, I’m sure they would illuminate.</p>

4

<p>IMO, “demonstrated financial need” is a polite way of pointing out that the schools FA package is based upon the financial need that the school determines and not what the family perceives its need to be. There are 4 ways schools can skimp (or be generous) on fin aid packages.

  1. Understate the cost of attendance by leaving out travel or low-balling book and incidental expenses.
  2. EFC calculation. FAFSA is standardized, but CSS/Profile calculations can be “tuned” by the college. Treatment of home equity would be an example.
  3. Meeting need. Schools may not meet full need (COA-EFC).
  4. Composition of the FA package. Good packages are heavy on grant money and light on loan money. (In my mind loans are a payment plan, not fin aid. We don’t call car loans financial aid, even though car loans enable many people to buy a car.)</p>
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<p><a href=“In%20my%20mind%20loans%20are%20a%20payment%20plan,%20not%20fin%20aid.%20We%20don’t%20call%20car%20loans%20financial%20aid,%20even%20though%20car%20loans%20enable%20many%20people%20to%20buy%20a%20car.”>I</a>*</p>

<p>Agreed…I like your statement that loans should be called a “payment plan”. The words Financial Aid mislead too many into thinking “free money.” People worry about qualifying for FA, only to learn that they’ve qualified for a loan.</p>

<p>Back to the OP…</p>

<p>Yes, you can submit a FAFSA and qualify for federal loans, such as a Stafford Loan. But, be aware there are limits to how much you can borrow each year.
Freshmen can borrow $5500 (is that going up a few hundred next year?)
Sophs can borrow $6500
Juniors can borrow $7500
Seniors can borrow $7500</p>

<p>As you can see, those loans won’t cover tuition, room, board, books, etc. The total is about $27k - which is a lot for an undergrad to borrow. The payments would be about $310 a month…about the cost of an EXTRA car payment for ten long years. That would be in ADDITION to any car payments you’d have during that time for a real car. Also consider that you’ll likely be paying rent, utilities, food, etc during that time.</p>