Is there a standard formula to determine how much subsidized direct loan a student will be offered? I just can’t find any clear information on this. The official information just keeps referring to those who are “eligible for subsidized loans” without stating what makes a student eligible.
Thanks.
Do you have significant financial need? Those with significant financial need get the subsidized loan.
(COA) less (grants/scholarships/awards) > EFC, then the loan, up to the max for that student’s year in school should be subsidized. $2000 per year is always unsubsidized for the Stafford loans if you can take the maximum loan.
Example:
COA =$30k
Grants/Scholarship = $15k
EFC =$10k
$30 -$15 > $10, so the entire $3500 available to a freshman would be subsidized.
If EFC is $20k, then not subsidized as $30 - $20 is not greater than $15k EFC.
That’s not what happened here. DS had an EFC of $22,000, and a merit awards of $10,000. Cost of attendance was $45,000 for the year at the time. No other need based or merit aid. His Direct Loans were ALL unsubsidized.
I don’t know, what is “significant”? While eligibility for a Pell grant is very clearly defined (we are NOT eligible), the subsidized loans seems much more undefined. Is it just a wait and see what the school offers situation? Since is a federal program, why would it be up to the school to define student eligibility?
Using very round numbers for illustration purposes:
COA = $30,000
FAFSA EFC = $15,000
Grant aid = $0
Merit/Scholarships = $5,000
Twoninanddone’s description makes sense but that’s not what I’ve seen/heard from other’s anecdotal experiences.
Well…if your school is like my kid’s you won’t get a subsidized loan. Your actual need after aid is only $10,000 (EFC plus merit is $20,000).
When we had that, our kid did not get subsidized loans.
If your school is like twoinanddone…you will get subsidized. Max subsidiEd is $3500.
Its April 15…did you NOT get your financial aid package yet? If not…contact the school. But first check your kid’s student portal…and email…and spam folder.
Not what I wanted to hear, thumper1, but better to know the reality.
DD is currently in community college. Planning ahead for spring 2017 when she will transfer to a state university. Flagship doesn’t even open the application for spring transfers until August so it’ll be a long wait to see if they offer any.
@Peb242 The state university should have a net price calculator on the website. What does it say what kind of aid you might get?
Yeah, I’ve played with the net price calculator. It states, however, that it is meant for first time freshmen only. It estimates $4,000 in subsidized student loan (which is nuts because that is more than freshmen can get in sub loans).
Yeah some of the NPCs can be weird
Schools that meet need will award subsidized as @twoinanddone described above. That’s how my school did it, at least. They even used the FAFSA EFC for this purpose.
For non-full-need schools, very rare.
@Lilliana330 …not true. Schools that do NOT guarantee to meet full need DO award subsidized loans to students who have financial need. Many low income students who attend public universities receive subsidized loans…and the vast majority of public universities do NOT meet full need for all.
@thumper1 That’s not what I meant…I meant that using that calculation was rare for other schools. I wasn’t referring to awarding the sub loans in general.
The plot thickens. I’m wondering how a situation like thumper1 has described comes about where a student with unmet need is only offered unsubsidized loans. I found a voluminous handbook (1,321 pages) online meant for schools’ financial aid counselors titled “Federal Student Aid Handbook” and published by the U.S. Department of Education. Sounds legit, right? Here’s a direct quote from page 3-142 (page 575 if you are looking at the PDF page count):
“In addition, a student may not receive a Direct Unsubsidized Loan unless the student has received a Direct Subsidized Loan for the maximum amount for which the student is eligible.”
The document also offers sample calculations to illustrate a student’s eligibility. It is as described upthread.
My son received the maximum Direct loans every year…apparently he didn’t qualify for subsidized as he never got them in undergrad school.
When he was in grad school, grad direct loans were still subsidized to a certain amount. He got subsidized loans rjen…but not in undergrad.