<p>If a college offers you an amount in Stafford loans (non subsidized) and you decide NOT to take them - will you be penalized the next year? I was offerred unsubsidized Stafford loans but a great uncle says he will loan me the $ at a better rate. I am worried that if I do not take the loans then when I re-apply for FA next year the fact that I did not take out any "official" loans will work against me.</p>
<p>Anyone have any experience with this?</p>
<p>I have only seen it possibly hurt people when applying for need-based scholarships because not taking out student loans makes it look like you can afford tuition. For the school however, that shouldn’t matter because most schools will just give the maximum unsubsidized Stafford (which increases each year) anyway. Note that certain tax benefits and the relationship you have with your great uncle may make it better to choose Stafford loans.</p>
<p>S1 was offered an unsubsidized Stafford Loan each year and declined, until his junior year when he opted for the max amount. He does not qualify for any need-based aid, but has had merit aid increased (slightly).</p>
<p>No, it will not hurt your opportunities for Stafford later on.</p>
<p>Thanks everyone. Have need based aid + stafford loans. I was just hoping that my need based aid would not be reduced next year because I did not take the loans this year.</p>
<p>I think you should ask your financial aid office. You can certainly take out the Stafford at any point, but how would anyone on this board know how YOUR school will interpret the fact you declined? They might simply want you to sign a statement saying you’ve borrowed from an uncle, but that could complicate filling out your FAFSA. Doesn’t the FAFSA ask for other contributions (maybe they mean gifts). The point is - your financial aid office can give you accurate info.</p>
<p>* but how would anyone on this board know how YOUR school will interpret the fact you declined? *</p>
<p>Colleges don’t care if people apply for Stafford loans. They don’t really have anything to do with them. It’s not their money; they don’t care. A college cannot take away your RIGHT to a federal student loan.</p>
<p>It doesn’t matter if the school doesn’t think you have “need.” A student can have a 100% full ride scholarship, or have parents paying for 100% of COA, and still take out a Stafford loan.</p>
<p>If the student has a full-ride scholarship, he may or may not be able to borrow Stafford loans. Schools can only award up to the Cost of Attendance, so the student can actually only borrow the amount in the COA that is not covered by other aid.</p>
<p>If the COA is $40,000 & scholarships total $40,000 … no Stafford.</p>
<p>^^^</p>
<p>Wait…what if the student has NO NEED…such in the case of a high EFC. Those students can still take out an unsub Stafford even if they have NO NEED. </p>
<p>Are you talking about the sub Staffords? I was talking about the unsub. I’ve seen kids with no need take out unsub Staffords.</p>
<p>Kelsmom did not say a student with no need cannot take out a Stafford. She said a studnt with full COA covered with financial aid (merit or need) cannot take out loans that take them over the cost of the school’s COA. Different thing alltogether.</p>
<p>Students with no need can take out unsub Staffords. So if the school costs $30k and their EFC is $32k they have no need but can get unsub staffords. But the total financial aid package cannot generally exceed the COA of a school. So if the school costs $30k and the student has a 0 EFC and a financial aid package that meets that full need of $30k with no Stafford then they cannot additionally take Stafford loans that take their financial aid package to $35,500, $5500 over the school’s COA.</p>
<p>So the OP can take out a Stafford loan in later years, even if he borrows money from his uncle during an earlier year. </p>
<p>I shouldn’t have used the full-ride example - especially since many so-called full-ride scholarships don’t meet 100% of COA. Many so-called full ride scholarships don’t pay for transportation or “personal expenses” - which I guess a Stafford could be used for.</p>
<p>BTW…do COA’s go up if a student does a study abroad? I do know some kids with free-rides that have used Staffords to help pay for some study abroad costs.</p>
<p>Pertaining the original question, my daughter was offered both sub and unusb Stafford loans for the 2008-9 academic year, but she was living at home that year and didn’t need to borrow. This year (for 2009-10) she was again offered the Staffords as well as a Perkins loan.</p>
<p>I wouldn’t think it would have any bearing whether you accepted the earlier loans or not. I mean, your need can change from year-to-year and that’s why you have to keeping filing the FAFSA each year. Even great uncles who are willing to loan you money this year, may not be willing or able to loan it to you next year.</p>
<p>I remember worrying about this sort of stuff my daughter’s first year. In her case she was offered WS and she already had an outside job so we wanted to convert part of the WS to a sub loan while she figured out how it was all going to work. We were worried she might not get WS next year if she did that. Ended up emailing the financial aid office and they said they would prefer her to turn down the WS (or part of it) if she wasn’t going to use it. That way they could offer it to someone else, and it would not affect her the next year. She converted 1/2 into a loan, and the next year she was still offered it.</p>
<p>I believe they have a standard order that they award items depending on your EFC and your need (computerized in the case of many schools). I don’t think most FA officers have the time or the inclination to look at the previous year and penalize you for not taking a particular award.</p>
<p>I’m wondering if the OP’s question and the confusion is based on the situation where if a person doesn’t apply for **institutional **FA as an incoming freshmen to certain schools, then he can’t apply for institutional aid later (unless something drastic happened like death of a breadwinner.)</p>
<p>A lot of students worry that turning down loans will “look bad” & somehow decrease their eligibility for aid in the future. I can tell you for a fact that financial aid folks think it’s WONDERFUL when students do not borrow!!! We don’t care how you paid for earlier years. If your uncle lets you borrow at a better rate, that is terrific. Take him up on it. You won’t be penalized later, OP.</p>
<p>Mom2collegekids, you do bring up an interesting point. That may cause some confusion.</p>