Subsidized Stafford ?

Parent Cafe
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<p>If a student is offered a "Subsidized" Stafford Loan within a University's Financial Aid package, and if the student subsequently receives a private scholarship (ex: for $2,000) can/will a university withdraw the Subsidized Stafford Loan offer?</p>

<p>I realize that if a Grant is offered (which is free money, and is typically need based), and if the student then receives a private scholarship, that the Grant could be withdrawn. I can follow that logic.</p>

<p>However, since a loan is not a grant, is not free money, and has to be paid back, I'm not sure if it is treated the same way as a Grant - in terms of being affected by receiving a private scholarship. </p>

<p>We have been advised, and we intend to adhere to the advisement, that if we receive any additional Financial Aid (ex: private scholarships), that we must inform the University's Financial Aid office of the new aid. </p>

<p>Has anyone been through this, or a similar situation?</p>

<p>Thanks</p>

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<p>bumpity bumpity bump</p>

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<p>No. subsidized stafford is independent from other awards. To verify this answer and to understand stafford see any website that offer stafford loans. The criteria for Stafford loans pretty much written as US Law.</p>

4

<p>*I appreciate your post, and am not questioning your answer. If anything, i want for your information to be correct, for my benefit. However..what say you about the following info on the two websites. *</p>

<p>On the following website, it mentions that the "subsidized" version is based on Financial Need, and the "unsubsidized" one is not. </p>

<p>That's the part that concerns me.</p>

<p><a href="http://studentaid.ed.gov/students/publications/student_guide/2004_2005/english/types-stafford.htm%5B/url%5D"&gt;http://studentaid.ed.gov/students/publications/student_guide/2004_2005/english/types-stafford.htm&lt;/a&gt;&lt;/p>

<p>Stafford Loans</p>

<p>What are Stafford Loans?</p>

<p>Direct and FFEL Stafford Loans have variable interest rates (unlike Federal Perkins Loans) and are for both undergraduate and graduate students. The loans you receive will be either subsidized or unsubsidized. </p>

<p>A subsidized loan is awarded on the basis of financial need. You won’t be charged any interest before you begin repayment or during deferment periods (click here for more information). The federal government “subsidizes” the interest during these periods.</p>

<p>An unsubsidized loan is not awarded on the basis of need. You’ll be charged interest from the time the loan is disbursed until it’s paid in full. If you allow the interest to accrue (accumulate) while you’re in school or during other periods of nonpayment, it will be capitalized. This means the interest will be added to the principal amount of your loan, and additional interest will be based on that higher amount. </p>

<p>Also, on this website, it also mentions the need basis:</p>

<p><a href="http://www.collegedegreeguide.com/articles-fr/fin-aid/aidgloss.htm%5B/url%5D"&gt;http://www.collegedegreeguide.com/articles-fr/fin-aid/aidgloss.htm&lt;/a&gt;&lt;/p>

<p>Subsidized Stafford Loan -- A need-based student loan. Interest that accrues on Subsidized Stafford loans while the student is in school (at least half time) is paid by the federal government on the student's behalf. </p>

<p>Unsubsidized Stafford Loan -- A non-need based loan program, so students with no financial need can even qualify for this aid program. Interest that accrues on Unsubsidized loans must be paid by the borrower, even while he/she is in school. The borrower may make periodic payments (monthly or quarterly, depending on the lender's policy) or allow the interest to accrue throughout enrollment and have the interest "capitalized" (added to the loan's principle balance). While capitalization eliminates having to make payments while in school but increases the total cost of a loan.</p>

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<p>The only answer that applies is the one your FA office gives you, but just to muddy the waters for you - a couple years ago s. was awarded only a subsidized Stafford and work study at his college. We appealed and he was awarded a grant and the Stafford was changed to unsubsidized. So it does depend on how they figure your 'need'.</p>

<p>We still felt the Stafford was the best loan out there and have chosen to subsidize it ourselves (but won't do it in the future because it's a lower interest rate than the home equity loan we're paying on). You will get quarterly, I think, statements showing you how much interest has accrued on your unsubsidized loan and can choose to send them a check to cover it OR just let it fold into the loan. I'm sure the FA office can explain the options.</p>

<p>On unsubsidized, the interest does NOT need to be paid while student is in school - at least that was my understanding.</p>

6

<p>Thanks, that is helpful to hear that someone was affected by an improved FA situation. I guess it probably comes down to actual numbers. For each individual there are probably ranges of values, such that once you cross over a line, then you affect other areas. And of course, they keep all those numbers secret. Of course. I have a question into the University. The question is of a general nature, since we do not know yet, if he will receive the pvt scholarship.</p>