Please help educate me on Unsubsidized Stafford Loans?

Lots of great experts here knowledgeable about financial aid so I have some questions:

Background: If my D20 gets accepted to a private college (we are full pay) we might want her to take out a small Stafford loan to help us cover some of the high COA.

  1. Since we are not expecting or will be asking for any other financial aid, do we still need to fillout the FAFSA and/or CSS? If so, when do we need to have it complete, October? Someone said the sooner the better or you might lose the ability to get the loan?;

  2. For colleges that are NOT need-blind, does it hurt us for filling out the financial aid paperwork (FAFSA/CSS) thinking we might be looking for need-based aid (i.e. any advantage of being a full pay family is lost)?

  3. Can you submit FAFSA/CSS for some colleges (the more expensive private ones) but not to the cheaper public colleges where we don’t need the Stafford?

  4. Do some colleges not consider you for merit-scholarships if you don’t complete the FAFSA/CSS?

I’m just trying to figure out the best strategy when D applies to colleges this fall. Thanks in advance!

I can answer some of these.

1). Yes. You have to fill out FAFSA to get a Stafford loan. There is no hurry though if that’s all you’re interested in because loan money won’t run out. It’s the institutional aid that uses FAFSA that might be limited.

2.) No idea on this one.

3.) You can include up to 10 schools to have FAFSA info sent to. I’m not sure how you do more, delete some and add others maybe? But, the point is you can pick and choose what schools to send it to.

4.) Yes, some schools require you fill out FAFSA to be considered for merit aid. Best to just ask the individual schools.

Yes you will need to complete a FAFSA in order for your kid to get the federally funded loan. You can complete it any time you choose during the academic year. The early filer thing is for limited funding aid types like federal work study and SEOG.

Need aware schools consider your ability to pay at some point during the admissions process. If your financial aid forms show you as full pay, this isn’t going to affect admissions because the school doesn’t need to give you aid.

You can submit the FAFSA to any schools you want to…and you can easily add schools later if you so choose.

This is college dependent. You will need to check each college for their policy. My kids both went to colleges which, at the time, required these forms to be completed even for merit awards. But anyway…you need to check each college.

Your kid will be eligible for a $5500 Direct Loan if you complete the FAFSA. You do not have to complete the Profile to get this federally funded loan.

@thumper1 “Yes you will need to complete a FAFSA in order for your kid to get the federally funded loan. You can complete it any time you choose during the academic year. The early filer thing is for limited funding aid types like federal work study and SEOG”

So does this mean she can wait for all of her college acceptances in say March 31, 2020 and then apply for the Stafford Loan?

^^Yes, she can even fill out the FAFSA after school begins and only send it to the school she’s already attending.

You can apply as late as Spring of her freshman year in college and have it retroactively cover Fall.

Yes, she can wait and complete the FAFSA in March if ALL she wants is that Direct Loan.

But if she needs it for fall payment…make sure you get it done in a timely fashion…March would be OK…August…not so much so if she needs it for fall.

Ok, so I think the approach is:

  • find out from all of the colleges that D is applying to if she needs to fill out the FAFSA form to be eligible for any merit aid;
  • If FAFSA is not needed for merit; apply for the Stafford Loan several months in advance of the new academic year (x 4 years) if we will use it for that fall's tuition expenses.

That sounds right. But really, if you are full pay, you can do the FAFSA anytime. My personal belief is that you just do it ASAP and get it out of the way.

My kids had some unsubsidized loans . With unsubsidized loans, interest starts to accrue when the loan is disbursed. We made payments toward the interest while they were still in school .

Helpful, thank you!