I see many threads that reference the maximum student loan being $5500 a year. Where does this information come from? Is that a particular type of loan?
The maximum Direct Student Loans…federally funded loans which are in the student name only…are…
Freshman $5500
Sophomore $6500
Junior $7500
Senior $7500
Thank you @thumper1 I’m a rookie here. We have a few years before our son goes off to college and I’m trying to plan. Are these typically offered as part of a financial aid package or are they something that students apply for to help make up the gap between what a school offers and what a school costs? Currently our EFC is 40K, but I think realistically we will be able to contribute 25k.
I would suggest that, as of now, if you hold the 529 account, that you double the amount that you have been putting into that. Realistically if your EFC says $40K you’ll pay $40K.
If your FAFSA EFC is $40,000…that should be viewed as the MINIMUM you will be expected to pay…as the vast majority of colleges do not meet full need for all students.
The Direct Loan amount is availble to anyone who files a FAFSA form.
Financial aid packages usually include loans, so this wouldn’t be another 5,500 on top of that.
The loan program is administered by the college so you do not have to apply for it separately.
There are two main ways to get a price tag lower than EFC -
- A low price tag school. One or more of your in-state public universities should be less than 40K. Starting at community college so you have an extra couple years to save up for junior and senior year may be even cheaper.
- Schools that give merit scholarships for GPA and test scores above a certain level.
If the student is competitive for merit aid, you might get your net below $40,000 at some schools such as Midwestern LAC’s. By competitive, I am not including pie in the sky type scholarships that are worth pursuing but highly unlikely. Rather, some colleges routinely award $15,000 to $25,000 merit scholarships through the regular application process to just “average excellent” students. They use this money to entice highly qualified students that might not otherwise consider a college in rural Indiana, for instance. Some of these colleges have lower Cost of Attendance to begin with, compared to some well known private schools and the figures you might hear tossed around.
Emory has a program geared towards helping middle class families meet their costs. Carleton has a special scholarship for middle class students. I am sure there are others, not to mention several automatic full ride options based solely on stats (again, these are stats that many middle class students already have) such as Alabama.
Also, there are parent PLUS loans (through the government) to make up any shortage between Cost of Attendance and student aid.
Many high schoolers and college students have summer jobs and earn $2,000 to $4,000 per summer.
There are often campus jobs either through work study or just through normal hiring, geared towards students (i.e., will accommodate student’s schedule, usually max of 10 hours a week). Availability varies by college and those with high need may have preference. This money usually helps with books (in future terms) and incidentals.
Thank you for the advice. We are fortunate enough to have an excellent state and UC system with strong, albeit competitive, programs in my son’s interest area. State Colleges would be about 25K with UC’s in the 35-40K range without any aid. Commuting is also an option, although not a desirable one. Private college will only be affordable if both of our children are in college at the same time, or my son receives some form of Merit Aid.