I received my financial aid package today. Everything is fine except for the $3500 direct subsidized loan part, which I am concerned about. For a mere 3500, I don’t want to take out a loan. If I decline this loan, will my grant go up? I have a 0 EFC (my parents make around 26,000) a year.
What I am struggling to understand is that if one declines a subsidized loan, (say 3500), and if the college does not increase the grant, then the student has to pay at least $3500. That means, for all colleges that take federal loans into account, (basically 95% of all colleges), every student needs to pay at least $3500. If they chose to take the the loan, then the student will pay it later. Either way, every student will need to pay at least $3500. Does my way of thinking make sense? Not sure if it right or correct.
Then, how do I know of people who only pay 1,000 or none at all? I’m sure colleges will definitely try to put loans as part of the package to lower the grant.
If your college put a loan in your financial aid package, they have decided to include a loan, not an additional grant.
If you decline the subsidized loan, you will have to find that $3500 someplace else. The school is not going to give you an additional grant because you decided not to take the loan offered in your financial aid package.
No, the school will not give you more money if you refuse to take out a loan. If you are talking about PELL grants, it is the federal government guidelines that establish the amount of the grant.
The school expects the student to pay for his/her education as best s/he is able. But they do not try to cheat you by requiring the student to take out a loan.
Some schools are more generous than others. Some have more money to provide scholarships than others. That is why some schools provide more money than others.
A subsidized loan (no interest accumulates while you are in college) is a very reasonable loan to pay off after you graduate, even if you have to borrow every year. It IS frightening to think about it, but their are ways to make the repayments affordable.
You don’t have to accept the loan, but your other grants won’t go up. If you have the $3500 you don’t need to accept. You should be grateful, my kids don’t get the subsidized loans.
Think of it this way – if colleges replaced loans with grants, why would anyone accept the loan? Even acknowledging income tax effects, grant aid is still better than even subsidized loans.
It all depends on the schools. As others have said, some are generous and others are not. Not all schools offer grants to applicants. Some don’t offer anything at all outside of the federal aid that anyone who goes to a participating school qualifies for.
No, you won’t get the loan replaced with grant money. You have to come up with the money somewhere else yourself. Some schools do not have a minimum student contribution, and also some students have merit money that can reduce the self help portion of their awards such as loans.