<p>my efc came back pretty high, almost 37,000 and i am probably going to consider loans. a few questions:</p>
<p>is it better to take them in the student's name or parents?</p>
<p>are the federal loans the wisest way to go?</p>
<p>i know the payments do not start until after graduation, but does the interest accrue from the date you draw on the money?</p>
<p>I don't know about outside loans but can answer about federal loans. With an EFC of $37,000 she would qualify for unsubsidized federal loans where the interest accrue from the day the money is paid to you. The unsubsidized federal student loan is the Stafford loan. The interest rate is 6.8%. The amount you can borrow a year is limited so you would probably need a combination of student and parent loans.</p>
<p>Finaid had some good information about loans
FinAid</a> | Student Loans</p>
<p>let's be clearer about how much in federal loans you will be able to take. the max for unsubsidized stafford loan for a freshman is 3500. It is in the students name. and yes, with an unsubsidized stafford loan, the interest accrues from the moment it is disbursed. You can pay the interest as you go or wait until after graduation.</p>
<p>the only other federal loan I'm aware of is the perkins loan and you won't get any of that with such a high efc.</p>
<p>Most likely, private loans taken in parents name will have better interest rates</p>
<p>there is no such thing as a govt loan for 30K in either the parents name or students name. </p>
<p>I'm sure someone will correct me if I'm wrong, but even a plus loan (for parents) isn't a federal loan</p>
<p>something else you need to understand -- with an EFC of ~37,000 you may find that those federal loans (stafford) are most likely part of the FA package offered by the school.</p>
<p>This is what you need to look at:</p>
<p>First, each school has a COA (cost of attendance). This includes room, board, tuition, fees and spending money. Let's just say that the school your student is planning to attend has a COA of $45,000.</p>
<p>Second, you need to know your EFC. There are multiple ways to calculate this -- the FAFSA gives you a number used to calculate eligibility for federal financial aid, many school use the profile to gather additional information and each school has the ability to determine your EFC. Let's just say that your EFC for both FAFSA and Profile is $37,000. for most families, the EFC according the profile is higher than the EFC you get from FAFSA.</p>
<p>Third -- you take the cost of attendance and subtract out your EFC and that gives you your DM (demonstrated need). For this situation, you have COA of $45,000 - EFC of $37,000. this gives you a demonstrated need of $8000</p>
<p>Fourth -- not all schools meet 100% of need, that is something you need to check on. If the school doesn't meet 100% of need, then they will "gap" you. This means that you are responsible for paying the EFC plus the amount that the school gaps you. let's just say that your school gaps you 10%, which for you would be $800.</p>
<p>Fifth -- so -- you are responsible for paying the $37,000 EFC and the $800 gap amount. The school is going to put together an FA package that totals $7200. They can put that together how ever they want -- grants, work-study and loans. A freshman is limited to $3500 in an unsubsidized stafford loan, so that will most likely be part of the package. They will probably also include ~$1500 of work-study and the rest in some form of grant if you are lucky.</p>
<p>In this hypothetical situation, your family would be responsible for paying $37,800, the student would be responsible for the work-study and the loan and the school would give you a grant for ~$2200, which isn't much!</p>