<p>My daughter's college of choice is offering us zero in grant money, a small amount in subsidized loans, and 42K in Federal PLUS loans. I just looked up PLUS loans and found that the current interest rate is 8.5%, and that repayment begins immediately. This is financial aid? I can get better rates on loans at my local bank, which seems to be offering academic loans at 3.625% (or LIBOR + 3%). The PLUS loan seems like a horrible deal. Or is there something I'm not seeing here?</p>
<p>Good question, Tlemachus; we got a boat load of loan ‘aid’ too…just wondering if it’s better to look around…</p>
<p>Actually the Parent plus loans are a good deal. You do not go through as strict a credit check and you do not have to start paying the loan back till after your child stops school or drops below full time status. There are forgiveness clauses for hardhsips and you can pay the interest as you go along if you choose. If your student should have a death(God forbid) the loan is forgiven. You are not required to take all of the money, you can take any portion of it. It also is usefull for back up, if you never even use it you can have the school send it back to the lender. Sallie Mae’s website as well as the Finaid .org can give you better or more in depth information. I believe it is well worth looking into t.</p>
<p>Take a look at this document which outlines the differences:</p>
<p>[FinAid</a> | Loans | Loan Tradeoffs - Public vs. Private](<a href=“Your Guide for College Financial Aid - Finaid”>Your Guide for College Financial Aid - Finaid)</p>
<p>Gulp – $42K in loans per year? That’s at least $168K in loans over a four-year degree, and more than that unless the college somehow doesn’t increase either tuition or R&B.</p>
<p>Unless your family is able to pay a lot of this out of current income, I’d really, really look for different options.</p>
<p>Well, we wouldn’t necessarily have to take the full 42K in loans. I think the reason we were offered this type of no-grant/all-loan deal is that, while my wife and I make modest salaries, we’ve managed to save a lot of retirement money (for which, of course, we must be punished…)</p>
<p>Thanks for the advice and links, everybody.</p>
<p>Telemachus - Did you fill out the FAFSA correctly? If so, you should not be getting punished for retirement savings which are specifically excluded from the calculations! Lots of people make errors on FAFSA, so it’s worth printing out and double checking each line if your EFC seems higher than that of others with similar income/asset levels. Here’s a link to the line by line instructions:
[Completing</a> the FAFSA: Financial Aid from the U.S. Department of Education](<a href=“http://studentaid.ed.gov/students/publications/completing_fafsa/index.html]Completing”>http://studentaid.ed.gov/students/publications/completing_fafsa/index.html)</p>
<p>I’ll double-check my FAFSA figures, but doesn’t Northwestern also use the PROFILE, which DOES include retirement savings? (Sorry, I just realized that I didn’t name the specific school in my original post.)</p>
<p>if your retirement money is NOT in a retirement account, then it IS counted as available to pay for college</p>
<p>Pre-tax contributions ARE counted in the year that they are put into retirement account</p>
<p>this applies to FAFSA. I have no idea about profile schools</p>
<p>Wait, maybe I’m wrong about PROFILE including retirement funds. I’ve got to go back and look at both of those applications. They were pretty intimidating, so maybe I screwed up somewhere…</p>
<p>Yes, I think you’re right about Profile asking about retirement funds (didn’t realize Profile was in play from your original post either). Whether or not the school factors it into their IM is up to them and I guess that NU figures you can just work til you drop dead! Just was a thought about double checking when you mentioned high EFC and modest wages that perhaps an error was made. Was your FAFSA EFC was more in line with your income?</p>
<p>Just saw your thread on the NU forum about getting a much better offer from Cornell. Cornell must interpret the Profile differently. I don’t think it would be inappropriate to let NU know of this offer, if done nicely, and ask if they can find a way to help her enroll at her top choice!</p>
<p>I’ve rechecked my figures on FAFSA, and they’re okay. I also noticed that FAFSA’s EFC figure for us is 37K. Northwestern says we’re expected to contribute 48K. Is this normal?</p>
<p>^^ Most people here know way more than I do about this, but since I’ve learned so much from them, I’ll state confidently that yes, it’s normal to have FAFSA say your EFC is $X, but have the school say your EFC is $X + much more.</p>
<p>Schools that do not meet 100% need (of which there are many) will “gap” you.</p>
<p>sueinphilly, sk8rmom, how did I do?</p>
<p>I’ve never had to do the Profile, but I’d say that’s right…especially since you verified your numbers! Just curious, was Cornell alot closer to the FAFSA efc on their IM formula?</p>
<p>heyalb - well done grasshopper (David Carradine’s “Kung Fu” television series, not sure if you’re old enough to remember that!)</p>
<p>Unfortunately, yes, I’m old enough. ;)</p>
<p>Cornell is actually asking for less than the FAFSA EFC. But the kid really prefers Evanston/Chicago to Ithaca.</p>
<p>I’m probably engaging in thread drift here, but back in the Stone Age, I went to a school in a suburban-setting (though closer to New York and Philly than Ithaca is), and my experience was that the schoolwork was all-consuming, so I didn’t get off-campus enough to really know what was out there beyond the university gates. I’m wondering if I should encourage her to focus less on setting and more on other factors.</p>
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<p>??? Cornell’s COA is *less than *your FAFSA EFC? And they’re still giving you aid?</p>
<p>Or am I reading this incorrectly? Hey, it could happen. :)</p>
<p>No, no, I meant that Cornell’s EFC was less than the FAFSA EFC. Sorry for the confusion.</p>
<p>Telemachus, it’s taken me a very long time to figure this stuff out. Half the time I think I’m an idiot, and half the time I realize that others are saying things that make no sense, i.e. “the school met my EFC and then some,” but I think that it should make sense, so I try to make sense out of it.</p>
<p>Whatevah. 90% of the game is half mental.</p>