<p>I've received about 18-19k in grants, as well as about 5500 in "recommended" loans from the school to meet my EFC of $0. The thing is, my father would much rather sell some of his stocks and take some funds out of his retirement funds, or borrow money from a few relatives than take out a loan with interest. However, he's scared that if he doesn't take out the loan, the school will find it "fishy" and not give us as much money next year, since it would seem like we could easily pay it off. Would this be the case? I agree with him and I don't want him to have to pay interest if he can borrow some money from my siblings or other relatives, but I also don't want to make the school suspicious.</p>
<p>You are perfectly within your rights to refuse a loan. It will not reflect badly on you.</p>
<p>No problem. They won’t blink an eye.</p>
<p>First - be aware that any stocks your Dad sells may be considered income and may affect your EFC next year, reducing your financial aid. For instance if you qualified for the automatic 0 EFC then selling stocks may make you ineligible for the automatic 0 EFC next year because your Dad might have to file a 1040 return. Or if he takes funds out of his retirement account it may take him over the income limits for the auto 0. Make sure he checks these things out.</p>
<p>Second - you say you have $5500 in loans. That sounds like the maximum in Stafford loans. Are any of those subsidized loans? If you had remaining need you may have up to $3500 in subsidized loans. If so remember the govt pays the interest on subsidized loans until you graduate or drop below half time, plus a 6 month grace period. Thus any subsidized loans would be interest free until that time.</p>
<p>Swimscatsmom, my school actually requested my dads stock information and adjusted the aid a little bit (not too much, like a little less than 1k, I think) as well as just general bank information. But thanks for the advice about the retirement fund! My dad is retired, though, would that make a difference? Like he actually has to live off that money, he is rather old for a dad…</p>
<p>And yes, I do have 3500 in subsidized loans. Does that mean if we pay them off before I graduate, there won’t be any interest?</p>
<p>
Yes. The govt pays the interest on the subsidized loans until you graduate or drop below 1/2 time plus a 6 month grace period. So if you pay them off within 6 months after graduating (or dropping below 1/2 time) you will never pay any interest on the loans. They may have a small origination fee depending on your lender. However there are lenders who waive the origination fees.</p>
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My husband is retired also and living off his pension. (we are both old parents, I’m just not as old 
). We live off money in the retirement account plus federal pension. As our AGI on our tax return is below $30,000 it makes our kids eligible for the automatic 0 EFC. If our AGI were to increase to $30,001 we would not be eligible for the auto 0 EFC. The EFC would still be low but not having the 0 can make a difference for certain aid such as the SEOG which, at both kids schools, is only awarded to students with 0 EFC. We also have a very small amount of stocks in non retirement accounts. If we were to sell 1 stock it would make us ineligible for the auto 0 as we would not be able to file a 1040a or 1040ez tax return. Again our income would be low and the EFC would still be low - but losing the auto 0 would have a bigger impact than the actual increase in the EFC. For instance my daughter’s EFC her first year was @ 400 so she did not get the SEOG as it is only awarded to those with a 0 EFC at her school. Her sophomore year and this year her EFC was 0 so she got the SEOG which is $2000 at her school. So with a 400 lower EFC she got an additional $2000 federal grant.</p>