Financial Aid Question

Paying for College
1

<p>Hello,</p>

<p>I am currently entering my second year at Virginia Tech. My family's very low income -- barely making ends meet -- so I end up getting good financial aid, and I had to take the maximum amount of stafford loans last year, and I am signed up for the same amount of loans next year. But I was fortunate enough to get a great internship this summer that pays very well, and so I should be able to pay off all of my stafford loans from last year, and reduce most of the loans for next year.</p>

<p>However, will reducing my loans for next year or paying off my loans from last year affect how much financial aid I get in the future? Like, will they reduce my financial aid later or give me less financial aid in my Junior year if they see that I have enough money to pay off my loans? </p>

<p>Should I just keep my loans and instead use the money I'm earning this summer to help my parents' financial situation?</p>

<p>Thanks in advance.</p>

2

<p>Your internship will be earned income and will be reported on the FAFSA. This will affect and raise your EFC, which will reduce your eligibility and amount for things such as the pell grant and other financial aid. Following that, how you use the money is up to you. Paying off the unsubsidized loans first is a great idea. The FA officer will not care if you paid off the loan, they just care about the EFC.</p>

3

<p>I wouldn’t pay off the Subsidized portion of the Stafford loan, though. That won’t start accruing interest until after you graduate.</p>