<p>My son is a Freshman attending UMass Amherst. He recieved a subsidized (need based) Stafford loan for the Fall '13 semester in the amount of $1,733.00. In January, he recieved a scholarship that we applied the the Spring '13 semester, great news! However, his subsidized Stafford payment of $1,733.00 that had been applied for the Spring '13 semester was removed from his account due to the reduced need (scholarship).</p>
<p>My question: Can he apply for an unsubsidized (non need based) Stafford loan midterm
to reapply the $1,733.00 to his account for the Spring '13 semester?</p>
<p>Any assistance would be greatly apprieciated.
Jason</p>
<p>It depends on the school’s official COA. You cannot get government money in excess of that official amount reduced by any scholarships and aid. If that is not exceeded, he can get the Stafford up to $5500 for freshman year (reduced by the $1733 from the fall) on a unsubsidized basis, as long as he does not exceed COA. He would have to complete another MPN since the terms and conditions of the unsubsidized loans are different from that of the subsidized ones in that interest starts accruing immediately and at a higher interest rate.</p>
<p>The financial aid office can give him instructions on how to do this.</p>
<p>Are you saying that you need the unsub loan to help you pay your EFC? That’s fine. That can be done. You can get the same amount in an unsub loan to put towards your EFC. </p>
<p>It sounds like the new scholarship ended up “meeting need” therefore you don’t qualify for the sub loan. Is that right? </p>
<p>You are correct that the scholarship met the “need” of the subsidized loan.
Our issue is we were not prepared for the payment that is now required to UMass.</p>
<p>Any time you take out a federal loan, a Master Promissory Note (MPN) has to be completed and electroincally signed. I believe an information session about the terms of the loan and a quiz is also required and has to be done on line. Your son must have filled this out to get the sub Stafford, but the terms of the unsub are different. In any case, a whole new loan app and MPN has to be completed because this is a whole other loan with different terms. And someone from Fin Aid should help him out with this.</p>
<p>After speaking with the school, it turns out my son willfully declined his Stafford loan so he wouldn’t incur debt and tried to do it without telling us. Do I have the right as the parent responsible for tuition to be notified when something like this happens?</p>
<p>Unfortunately, this is the sort of thing that is between the kid and the school even though the parents normally are the ones footing the balance of the bill. Sit down with your son, have a money talk about loans, etc. Get to an agreement about who is responsible for what and how your family will deal with the interest on the sub and unsub loans.</p>
<p>In our family, the kid is expected to take out the full federal loan each year. Part might be sub, or it all might be unsub. In either case, she is expected to take it out, and is expected to be the one to pay it off. We cover the rest of tuition, fees, housing, and meals. She buys her own books and pays for her own optional personal expenses and non-school activities.</p>
<p>No. Your son is an adult under the law. There have been cases when college students have gotten into trouble, gotten fined, and though the bill goes directly to the parent, and the parent is on the hook for it, they are not entitled to the information. They have to get it from the student. You are not entitled to anything of your son’s unless he signs it the right for you to have over to you. </p>
<p>A friend of mine paid for all of her DD’s things during college. Generously, and really stinted on herself to do so. Found out to her horror that her DD was $30K in debt. She had taken out the Staffords each year, pocketed the amounts as refunds as Mom was paying the costs and she cranked up her credit card limit too up to the max and used every bit of it. The parents were quite upset.</p>
<p>Yeah, that’s the first thought, but punishing a half baked kid who you are trying to get fully baked and out of the oven on his own, is like cutting off your nose to spite your face. You have to be very careful how to deal with them. My friends went ape,and both moms, and they don’t even know each other, refused to pay the money. And both times, the kids had problems that the parents really didn’t want. One did not get a financial services job due to credit report, the other in her thirties was turned down for a mortgage–she’s married with a child and pregnant. The loans and credit card are still not fully paid up. The interest rate on the card was astronomical. The old expression of “it hurts me, more than you” is so true when it comes to kids. Credit and jobs have become tough these days, and they are intertwined. Both were girls, by the way, who did this.</p>
<p>Schools can’t substitute unsub for sub when they have to reduce a sub loan due to a late scholarship - this is because the terms of the unsub loan are not as favorable as those of the sub loan. The student simply has to contact the financial aid office & ask how to increase the unsub loan to cover the balance. It’s not an unusual request for the aid office!</p>