Just wondering for my own clarity of costs and some huge gaps friends have, when schools look at EFC’s are student loans considered within that contribution, or is the EFC above and beyond whatever loans the student may get?
The EFC is the expected family contribution. You will be expected to pay at LEAST that amount (remember, most colleges don’t meet full need).
Federally funded student loans can be used to help meet your financial need. If your need is fully met without loans, you can take the Direct Loans and use them to help fund your family contribution.
Use each college’s net price calculator to see what the net price (= list price minus grants and scholarships) is estimated to be. Colleges may allocate net price differently between parent contribution, student contribution (including student loans and work earnings), and unmet need, but that is less important than the total net price. The allocation may matter if you get outside scholarships, since some colleges may allow applying them to student contribution and unmet need (but not parent contribution) before reducing their own grants.
Still confused. So round figures, say a $14,000 tuition bill, EFC of 8,400, with student Loans offered 6,500. The 6,500 student loan is not considered by a college to be included in the family contribution of 8,400, but rather, the tuition less family contribution = balance which can be paid for by student loans? So in the end the family actually pays 100% between now and later when the student pays the loans off. Small figures, I know, just want to be sure I understand the process from a FA point of view.
If the tuition bill is $14,000…and the EFC is $8400…and the ONLY aid you receive is a $5500 Direct Loan (that’s the freshman amount)…then the balance your family would need to pay themselves in addition to the loan for the tuition portion is $2900.
And yes…you have to pay back the loans once you graduate.
Are there other costs besides tuition? (e.g. books, room and board or commuting and living at home costs)
How much are the grants and scholarships?
Some schools meet financial need without federally funded loans for all students. Some meet full need for all without federally funded loans for lower income students. Some (most) include the Direct Loan in the need based aid award.
A school with a tuition only cost of $14,000 sounds like it’s probably a public university…is that correct? If so, unless it’s UVA or UNC-Chapel Hill, your full financial need is not guaranteed to be met…at all.
UVA does not put loans in packages for students below a certain income level. But above…the loans ARE included.
@MonroeMomof3 The “EFC” given via the Fafsa is not necessarily the total “Family Contribution” the student or family pays. It depends on the college and it’s generosity. In your example, in the end, the 8400 means nothing. The confusion in terms misleads many.
Ideally, a college would be frank. In this case, “Tuition is 14000 and we’re giving you nothing. Your bill is 14000 and you can pay it or pay part, borrow up to 6500, but we expect 14000.”
Instead, some “package” a loan in there, to make your part “seem” less. It looks like you only have to cough up 14000 - 6500 loan = 7500. Some kids and families think it’s deal and forget the loan is on them. You can see, in this case, the 8400 Fafsa EFC means nothing.
Worse, some kids have a tuition and room/board cost of far more than 14000 and end up taking both the student loans and finding other loans and one day, after graduation, the reality hits them that they’re acres in debt.
JWU Online. So no scholarships or grants offered thru the school. That would be the cost, just tuition and books.
Then yes…you are going to need to pay the full costs…but your kiddo can take out the Direct Loan to help.
Then your net price would be the list price, unless there are outside scholarships or government aid like Pell grant. How the student and parents allocate the price between cash, loans, and student work is up to the student and parents.
Typically, schools that meet full need will calculate an EFC based on information provided on FAFSA/Profile/other financial aid forms. The EFC will then be subtracted from cost of attendance (COA) to come up with the “demonstrated financial need” amount. The demonstrated financial need will be met with a combination of grants/scholarships and/or loans and/or work study, depending on each school’s policies. My guess is that generally, schools that don’t meet full need also do not allocate loans to the EFC side of the equation.
thank you everyone!
Oh, while I have you… can you apply for a parent loan at any time during the year. For my other child, may not need some extra $ til the spring tuition, can i apply for it then or do I need to do it now?
Any time. It may take a few weeks to process, so give yourself time.