The interest on unsubsidized loans begins accruing when the funds are disbursed (half of the annual amount borrowed per semester). The interest capitalizes THE day that the student has been out of full time enrollment (last day of that semester) for six months - after that, interest begins to accrue on the interest. I tell students it’s like the interest sits in a bucket that keeps filling up during in school deferment & grace period, with interest accruing in the loan but not the bucket of interest. Once that 6-month grace period is over, the bucket gets poured into the loan & interest accrues on the whole thing from then on. The interest rate for each year changes based on Congressionally-mandated regulations, but the rate for each loan borrowed in a particular year doesn’t change (that is, it’s fixed, not variable).
thank you, kelsmom. These loans are not cheap.
Actually, the interest rates for these loans aren’t particularly high considering they are given to students with no income verification, no collateral, and likely no assets to attach.
Hi, I’m disabled and low income so get SSI. It’s not much. My dad died this year and left my son 200k in a trust for his education. I listed the 200k on the FASFA form under student assets under the section that included trust funds. I have no assets.
Our SAR came up as $0 which I’m super confused about. I literally was expecting it to say $40k or something like that. Have you ever heard of anything like this? I mean great if they came lower like $20k or something but I’m actually worried they will see SAR of $0 and not offer much merit or grant money and it will be loan money which we don’t want to do.
@kelsmom will do a good explanation….but my guess is you qualified for an auto $0 EFC.
Really…schools don’t give less aid to students with $0 EFC. And in your case, you have a trust to help fund college. A true blessed gift.
I agree - you most likely qualify for automatic 0 EFC. As a result, your assets & your child’s income/assets are ignored. This is not detrimental for you. Your child will get a full Pell grant & possibly a federal SEOG grant (those are determined at the individual school level). The only problem would be if your child applies to a school that fully meets need - it’s possible that such a school might take the trust into account when awarding institutional aid. However, I am pretty sure not all will do so.
Thank you so much!!!
We recently took loan for D21. Will there be any advantage for D24 for need based aid?
No. In my opinion. But @kelsmom can elaborate.
No, because debt is not considered for purposes of determining need based aid.
Thanks! I mean we had a need so we took the loan. Usually they even ask for the remaining mortgage also on net price calculation then why the loans are not considered as need?
We’ve taken out loans for 5 kids, didn’t change anything, debt doesn’t benefit you when it comes to FA.
That is to compute your home equity. Which some colleges will tap as an asset to some degree for college.
Regular loans you take out have no impact on future college kid financials.
Hi! So my son got accepted EA at three privates - all similar costs. I’m disabled so we are low income but do have some $$ for college. The two in California only require FASFA and between the merit scholarships, the federal grant, state grant and then both privates offered around $30k in their own school grant - we are still paying but makes it affordable. The one in Texas, which requires CSS we got a small merit scholarship then the federal grant, (I knew we wouldn’t get the state grant), and that was it! (I mean they suggested loans but we aren’t doing that. The letter said FASFA said our contribution would be 0 - then it said their institution said we would pay $70k!!! Which is insane. Would love to know if this is because CSS takes both parents info. His father pays a pittance in child support and will be contributing 0 to college. I’m disabled and have no icome. So to see them say we would pay $70 k which is more than we have set aside (and we have a decent amount.). I don’t know if I call and see if it’s because of his fathers stuff on CSS and then appeal that. Or if my mistake on CSS where I said medical costs were $700 which is how much my son’s is while I spend 30k a year on my medical - did that mess it up? I just can’t make sense of it. If anyone has thoughts would be so grateful!!
The css situation sounds very similar to one we are dealing with. Can I send you a pm? Curious to see if same school.
The other privates he got into are in Cali - no CSS - both are actually a bit more in cost than this one - and both of them made offers that we can handle and that make sense. (The offers were literally $182 a year different from each other which is kind of crazy.). The CSS one is saying we would pay 40k more than either of the others.
There are two possibilities. One, the school doesn’t guarantee to meet need and you were gapped. Two, the non custodial parents was required to file CSS & your ex submitted it. If that is the case, the school expects both parents to contribute. They don’t care whether or not he actually WILL. Sounds like this might be a “no.” Many of us had to tell our kids no to at least one school because it wasn’t affordable.
Is it worth appealing? Get his dad to write a letter saying he is not a part of his life and will not contribute a dime after his last child support payment in May? (Which is literally what he said.). He lives 30 mins from us but hasn’t seen his son in years.
We have money put aside. Both of the privates in Cali - in no way “lesser” institutions - gave enough institutional grant money that along with Pell and Cali grant - we can pay each year and not go into debt. I mean, we would be paying a respectable amount.
SMU even costs less than these but would be $25k+ a year more.
You can try appealing, but you probably won’t get anywhere. A lot of parents, even happily married parents, refuse to contribute to their kids’ education, but the underlying responsibility remains. I would not get your hopes up, but you can always try.
I don’t think this will help your case at all. Non-custodial parent waivers are for kids who have NO contact with their parents. Clearly, if you can make this request for a letter, you DO have contact.
But that’s insane. Have contact in that he didn’t pay his pittance of child support for 2 months and I called to say I was going to take legal action. He said he had no money and then went on to say that after May he was done. I asked about college and he said he is moving to Slovakia with his gf and since no one helped him pay for college - he’s not helping. He’s a real gem, right? I got upset. I asked if he would write a letter and have it notarized and he said “fine” . He hasn’t talked to or seen my son 6 years even though we live in same city.
I suppose if they are given this info and are ao callus that they say too bad - then to hell with them right?