My child accepted an offer to a school that gave her a scholarship that covered all but $5500 of room & board. They divided it between subsidized ($3500) and unsubsidized ($2000). She had to report private scholarships, which amount to $3000. She also has a NMSC scholarship in the amount of $2500, which I didn’t report at the time because I assumed NMSC would notify the institution.
We have now received an updated award letter reflecting the scholarships, minus NMSC, and they’ve knocked her subsidized loan amount to $600 and raised the unsubsidized to $4800! Does this make any sense? Obviously, once we report the NM scholarship, she won’t have any expenses but I was surprised to see the scholarships basically eliminate the subsidized loan. The NM is only for 1 year so presumably that means if she doesn’t find additional scholarships then going forward she won’t be eligible for a subsidized loan? I can’t find any information on the fed’s website addressing private scholarships. She’ll still have the indirect costs to cover so we’d been contemplating having her take a small loan to help cover books.
It’s not that the scholarships are private or public, but that her need above EFC is now lower. You have to qualify for the subsidized loan amount, and it seems that your extra scholarship amount was e out to knock the loan below the efc amount.
If the NM scholarship will be paid to the school, you don’t have to report it but if it is paid to you, you do.
She can’t receive any subsidized loans that would cover any part of EFC. That scholarship covered most of her remaining need, so they had to reduce the sub loan.
It’s ok for unsub to cover EFC, but not sub loans.
what is your EFC?
Yes it makes sense. Her need decreased, so subsidized was decreased significantly (that goes first, because subsidized loans are based on need and unsubsidized loans are not).
Review this school’s stacking policy. If she wins more scholarships, it is possible that the scholarships will replace the loans before they start reducing her institutional scholarship.
Congratulations to your daughter. It’s a grea offer no matter where the money is coming from!!
The outside scholarship actually reduces your financial need. Therefore, your need based aid is reduced. your school reduced the self help portion.
i would give them a call and inquire about the amounts of subsidized vs unsubsidized Direct Loans. Maybe they can adjust this IF the need based aid she is getting does not exceed the cost of attendance minus your EFC. Worth a call.
The amount of subsidized loan eligibility will be calculated every year depending on need (COA-EFC).
If she doesn’t get the NMF scholarship next year presumably her need will be greater and she should qualify again if your EFC doesn’t change.
Said another way.
Need=COA-EFC-scholarship-grants
A subsidize direct loan is only offered if need>0. The maximum amount for freshman is $3500 or Need whichever is lower. In your case your need was less than $3500 so the loan amounts were adjusted.