<p>I need advice from parents who have been through this before---our eldest daughter will be attending college this fall. She received a very good FA package at a great school. Even with need-based grant from the college, she has an expected work-study portion ($2100), expected student contribution ($2500); and a college loan ($2625---from the institution---its "subsidized" but the rate is 9%.)</p>
<p>She is getting small outside (local) scholarships and we are wondering how best to apply them? The loan portion? Work-study? Student contribution? We know it can't be applied toward the EFC. And if she gets more than the student contribution+loan+work study (not likely), it would reduce the institutional aid.</p>
<p>Right now she stands at $2000 in local, outside scholarships (not renewable.) We are leaning towards the loan (since the rate is so high, and we'd like her to graduate with lowest debt possible---grad. school will be a likely next step and expect her to accumulate debt there. What would you apply the outside scholarships towards?</p>
<p>You will need to check with your DD’s school. Most colleges don’t give you a choice in how to apply the outside scholarships–they will apply them based on their own policies.</p>
<p>From our discussions with financial aid officers (and interim director) at workshops and presentations during visits and open house visit for admittees, my understanding is we CAN choose how to apply them as long as the scholarships don’t go above covering the student contribution, college loan, and work-study amounts.</p>
<p>Actually, from the school’s website: “Students who win outside scholarships receive the fullest possible benefit of those scholarships. We use outside scholarship aid to reduce the student loan, academic year work, and student contribution from vacation earnings before making any reduction in grant aid. For most students, this means that all of the outside scholarship will reduce self-help.”</p>
<p>So, we CAN reduce daughter’s self-help with the scholarships—just need opinions of what to apply the scholarships to. Please any advice, or experiences you have had in similar situation. Pros/cons? Thanks.</p>
<p>Congrats on the scholarships! We had a similar choice and chose not to take the sub loan, realizing D would probably have to take loans in years ahead. IMO, reducing debt was preferred. However, if child is stressed about handling college work and a work study job, then it might be beneficial to lessen the work study.</p>
<p>9% loan :eek: ? Do they award any federal loans? The subsidized loan interest rate this year on the sub Stafford is 3.4%. 9% is crazy.</p>
<p>I agree with ^^ at 9% I would reduce the debt, unless she is worried about working her first year.</p>