<p>:-( Our Heloc is a titch higher right now than a Stafford and only resets once a year. Hopefully the rate will go south and then and only then would it make more sense than a Stafford. The only benefit would be to be able to deduct the Heloc interest but really we’re still not talking a huge amounts of interest given the max amounts of Stafford.</p>
<p>Can anyone think of a disadvantage to letting the colleges know what your financial status is if your income is relatively high? For instance, would a college not give you merit aid (or give you less merit aid) because they thought you could afford its COA without a discount? I know there can be an advantage (in admissions) to being a full pay student, but is there a disadvantage?</p>
<p>Merit based aid, by definition has nothing to do with your financial situation. Needs based aid does. This is calculated by doing the FAFSA. Regarding Stafford loans, etc, I look at subsidized staffords as free use of money until you get out of school,(4 yrs 6 mos) so the thing here is to use it and have a plan to pay it off once you graduate. the rates this year are 5.6%, then 4.5% in 10-11, 3.4% in 11-12 and back to 6.8% in 12-13. Unsub Staffords are 6.8% and interest accrues immediately. Whether or not it makes sense to take an unsub is not determined only by the interest rate, but rather by one’s overall financial situation and whether or not money can be borrowed elsewhere under more favorable terms.</p>
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<p>Actually at SOME schools, merit aid does take financial need into consideration also. It’s not as clear cut a line as you are making it out to be.</p>
<p>Merit based aid is not calculated using the financial aid formulas. What you refer to is a financial aid officer using ‘discretion’ to award non-needs based aid using other than the financial aid formulas. Sorry if that wasn’t clear</p>
<p>Aidadvisor…what <em>I</em> meant was that there ARE merit awards that take financial need into consideration.</p>
<p>I am a financial aid advisor, and I do NOT look at subsidized Staffords as “free use of money.” I have seen far too many students take out the maximum in loans, get a refund check, and promptly waste it. Even relatively frugal students may not be able to pay the money back - “plan” or not - when they graduate. It’s a gamble to borrow when the money isn’t needed. If a student needs to borrow, sub loans are a great option. If they don’t NEED to borrow, though, they absolutely should not do so. Oh … and if they don’t actually need the money to pay for educational expenses … well, they do have to certify that they will be using the money for educational expenses, so again, they shouldn’t be borrowing.</p>
<p>Subsidized loans are free use of money. Just make sure you take the money your kids get and either apply it to their educational expenses or put it in a bank account. Otherwise, that money is going towards my next beer pong game (damn straight, I don’t pay for alcohol–I’m in college!)</p>
<p>If someone lends me $10,000 with no interest or payments due or accruing for 4 1/2 years, that is most certainly ‘use of free money’. Maybe the word ‘free’ is getting confused with the word ‘responsible’. Technically this is one of the most excellent ways to borrow money, although the amount is limited and in most cases will not be enough for the entire cost, of course.</p>
<p>I have a couple of questions related to an earlier posting on this thread. Our EFC is higher than COA at colleges that S is interested in applying to. Would it be in our best interest to complete the FAFSA and apply for financial aid anyhow, even though we probably wouldn’t receive any aid? Is there any potential risk or harm in doing so?</p>
<p>If S is applying to selective programs or schools, could it negatively affect S’s chances for admission if we apply for financial aid (especially if such school are reaches/possible matches)?</p>
<p>Very doubtful it would have a negative impact because as you said, your EFC will likely be higher than the COA anyway. The school really isn’t on the “hook” for anything in your son’s case.</p>
<p>Typically, it would be an issue if the student has a low EFC/high need situation. </p>
<p>For instance, two comparable students are on the bubble (assume its a wait listed/stretch situation). The school is trying to decide which one to offer the admission to. It is later in the admissions process, so much of the funds have already been allocated and there isn’t much left in the budget for the year. The only difference between the two students is one has a high need at the school, the other has a low need. </p>
<p>Who are they more likely to offer admission to? The student who needs a substantial amount of help to pay for the school? Or would they more likely offer it to the student who already has the resources to pay for the school?</p>
<p>They know they don’t have the funds left to help the high need student, so the low need student is more likely to get the offer.</p>
<p>It shouldn’t be a problem in your situation.</p>
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<p>Will your S be trying to get any merit-based aid? I think most schools that offer merit aid require the FAFSA to be eligible for it, even if you won’t get any need-based aid.</p>
<p>Also check the FA policies at the schools that you are interested in applying as some schools have policies that if you do not apply for FA freshman year, you may not be eligible for FA in subsequent years or pushed to the very end of the line.</p>
<p>Other that getting sub/unsubsidized loans, people’s financial situation change; people die, lose jobs, business, get divorced all which can affect a student’s FA status. If you should have a change in life circumstance, it is easier to have your FA adjusted, if you already have an application on file.</p>
<p>Thanks for the responses. It seems that there is no harm in completing the FAFSA, regardless of whether or not we qualify for financial aid.</p>