I Don't Understand the Merit Aid/Financial Aid Formula

Parent Cafe
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<p>

Now I’m confused. We have an EFC which exceeds the COA, S got a large merit scholarship (which reduced COA), and we have everything else in loans. In fact, the loans were so large that both semesters they sent us a check for the balance over the tuition/room/board/fees. How did that happen?</p>

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<p>The finaid office made a mistake?</p>

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<p>Quote:
Originally Posted by kelsmom
Remember, folks, that Need cannot be exceeded if there is even one penny of federal aid involved — schools can give any amount of their own money they want, but as soon as they award ANY federal aid — including loans — Need cannot be exceeded. It’s not about whether or not you or I agree. It’s about federal regulations.</p>

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<h1>Now I’m confused. We have an EFC which exceeds the COA, S got a large merit scholarship (which reduced COA), and we have everything else in loans. In fact, the loans were so large that both semesters they sent us a check for the balance over the tuition/room/board/fees. How did that happen?</h1>

<p>That’s not unusual. You were given unsub loans. You have no need, so your child (or you with Plus), can get loans that can go towards EFC.</p>

<p>Unsub loans aren’t looked at the same way. They can be used to help with EFC.</p>

<p>For example…</p>

<p>EFC = $55,000
COA = $30,000
Direct costs to school = $15,000 (tuition only because student lives off campus)</p>

<p>Need = $0</p>

<p>Merit = $15,000 (full tuition scholarship)
unsub = $5,500</p>

<p>So, in the above case, the student would get an unsub loan if requested and get a refund sent home to help pay for room and board.</p>

<p>But…if the student had received full COA in merit (in the above example, that would be $30,000), then no unsub loan would be issued.</p>

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<p>Thank you m2ckm, that makes sense. Confusing enough for those of us not all that familiar with the various loan vehicles!</p>

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<p>m2ck explained it well! :)</p>

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<p>interesting thread and good comments. preferential packaging comes to my mind. i googled and found that there is an excellent explanation of “the real deal on financial aid” on the Muhlenberg website. here’s the link:
[Muhlenberg</a> College| The real deal on financial aid](<a href=“http://www.muhlenberg.edu/main/admissions/realdeal.html]Muhlenberg”>http://www.muhlenberg.edu/main/admissions/realdeal.html)
the read is well worth your time.
as they explain, the students the college would most like to enroll, receive the most advantageous f/a packages.</p>