My son only needs loans for the spring semester and it should total about $8500. We are covering the first semester with 529 money. Does he apply now or wait until closer to spring semester?
First, is he already in college and what year? Is he a dependent or independent student for FAFSA?
I would suggest taking the loans (subsidized first if offered) both semesters, and saving the amount he doesn’t need for second semester.
A dependent student can only borrow $5,500 first year, $6,500 second year, $7,500 junior and senior year as federal direct loans.
Ok. This will be his first year and he is a dependent.
That makes sense. Thanks
As a freshman he should have been offered $2,750 a semester in loans. Total of $5,500 a year.
If there is still $8,500 left to pay, can you cover the extra $3,000?
Is he working this summer?
Will you qualify for the AOTC (American Opportunity Tax Credit)?
Do not take unsubsidized loans for fall if you don’t need them for fall. The interest accumulates when the loan is disbursed. Instead, your S can go to the financial aid office in the fall to ask how to request a loan for spring only - he can borrow the entire annual amount in spring.
Thats what I was thinking but just wanted to confirm. Thanks
Dont use all 529 funds for fall semester tuition if you want to take the American Opportunity Tax Credit of up to $2500 on up to $4000 of tuition/fees.