<p>Tell me what you think of this
preferential financial aid package.</p>
<p>Preferential financial aid package = $30,000
Broken down into.........</p>
<p>Merit scholarship = $10,000</p>
<p>Grant money = Zero $$$s</p>
<p>Loan money = $20,000</p>
<p>Work Study = Zero $$$s</p>
<p>COA = $40,000 plus</p>
<p>EFC = $24,000</p>
<p>Preferential financial aid package
provides $14,000 over demonstrated
need. Do you see this as a good
financial aid package in light
of the $20,000 in loans?</p>
<p>Is that a $20K loan each year? If so, it's a terriblr package. Even if it is for four years, it's a below average package.</p>
<p>Yes..... it is a $20K loan each year.
Naturally, it would be better with
more grant money and work study
in the financial aid package. My
initial read is that it is a terrible
package. </p>
<p>On the plus side, the 20k loan
per year makes it much easier
to finance the COA over 4 years
with the lower student interest
rates and no payments until after
graduation. In that 4 year period
we are able to invest the 24K EFC
and hopefully obtain a decent
return on investment (ROI)
therefore, reducing the total COA.<br>
In addition D's summer earnings
and non-work study jobs at school
provides income to reduce COA.</p>
<p>When looking at packages, I mentally add the loans back into the EFC.. because in the end, it's all coming from the same place...</p>
<p>It's a horrible package if it's $20 k a year in loans. The average college student takes out a total of $20 k for 4 years of college.</p>
<p>You do not have to accept all of those loans. You could choose to accept only $6 k a year in loans because that combined with the rest of the package would cover your financial need.</p>
<p>In my opinion you should NOT accept loans that are in excess of what you NEED to attend college. To do so places you in added debt for no reason. I agree with NSM...take out only the loan amount you NEED to meet the college expenses and not a nickel more.</p>
<p>Northstarmom,</p>
<p>You are correct in stating
that 6K in loans and the
24K in EFC plus the 10K
in Merit aid covers the COA.</p>
<p>Why do you suppose the Financial
aid office offered the additional
14K in loans?</p>
<p>I have no idea why the aid office offered the extra money unless it thought that somehow that would make you pick their college over other schools offering aid more in line with what you need.</p>
<p>Since the extra aid that you're offered is in loans, that's no real help for you, so do pass on it unless you want to carry a heavy load of unnecessary debt after graduation.</p>
<p>If you will not be making payments until after graduation, will the interest accrue as part of her balance, or will you have to at least pay the interest until principal repayment begins? </p>
<p>For some of the subsidized loans [subsidized Stafford/Perkins], the interest is paid by the Feds until the repayment period begins. </p>
<p>Other loans [unsubbed Stafford/PLUS] allow you to defer payments, but the interest is added to the principal until repayment begins, and increases the total amount that is borrowed.</p>
<p>Many colleges include loan information for parents as part of the package even if their is no need, no financial aid app. Some of them are loans available to nearly anybody like the PLUS loans or some state programs. My guess is that this college does have a nice loan program it can offer to anybody and does so, as many of us do take out loans to meet the EFC. OR it could be part of preferential packaging to offer these loans which are a notch better than the PLUS loans. If you were planning to take out loans to meet the EFC, which as I said before, is something a lot of families do , you have a nice option it seems. Do compare terms and interest rates of these loans as compared to other loan options to make sure they are a deal. But as NSM says, if you don't need the loans don't take them. Most of us are not so disciplined as to take extra money, invest it and make off of it. More likely to nibble at it and end up that much nmore in debt.</p>