Really basic student student loan question

Our intent was for our kids to get through college with no debt. D20 has some nice merit awards. Due to a high EFC, an unusual income year in 2018 and other assets that would make financial aid at a CSS school very unlikely, we did not complete the FAFSA or CSS and did not apply for FA at any of her schools.

Of course the school she is dead set on is the one that gave her half as much merit as the others. We are considering having her put some skin in the game and taking the $5,500 per year in loans.

Do we have to apply for FA through the school to access these loans? Do you have to qualify for aid through the school, or can you access the loans directly through the Federal student loan program? I realize that will be too late for 2020, but in deciding if this school is financially viable, I would like to know something about the process in future years before committing.

Yes.

You must go through the school.

You are not too late for 2020.

Thanks - so it’s a need aware school. Are we guaranteed the $5,500 loan no matter what they do with other aid decisions?

Yes (assuming the student is a U.S. citizen or legal resident). The federal direct student loan program uses federal money and is administered by college financial aid offices. It’s an entitlement.

You don’t have to apply for FA while the app is still being evaluated. You can apply after being accepted or even when she heads off in the fall.

To get the $5500 federally funded student loan, all your kid has to do is complete the FAFSA with you. Completing the FAFSA will make her eligible for that loan.

You do the FAFSA form and submit it to the college(s).

If all you are looking for is this loan, you can wait until after your student gets accepted and then submit the FAFSA.

You do not need to complete a Profile to get a federally funded loan.

Your kid can get this loan by submitting the FAFSA to her college any time before the 2020-2021 academic year ends at her school…allowing enough time for it to process before the academic year ends.

As noted, it’s something any student is entitled to receive…as long as the loan doesn’t make aid exceed the cost of attendance at the school…but it sounds like that’s not the case with you.

Make sure going to the most expensive school is worth it to her. $20k in loans doesn’t seem like much to a 17 year old, but paying them back is not fun (about $200/mo for 10 years).