<p>Turning "down" - apologies for my typing skills.</p>
<p>In addition to a not-huge grant, USC offered my child a small subsidized stafford loan (we will take it), work study (she'll do it), and an even smaller unsubsidized stafford loan, as financial aid.</p>
<p>The "Paying for College" book says not to turn down ANY need-based loans, or the FAOs will get the idea you didn't really need the money. Apparently an unsubsidized loan is considered a need-based loan.</p>
<p>So I need to pay 6% from day 1 on $2000 if I don't want to see my daughter's grant dinged by $2k next year? Anyone with experience in this?</p>
<p>This just seems to make no financial sense...I can go out right now and get an introductory credit card with 0% interest for 1 year and charge that amount then work on paying it off within the introductory period. My bank is offering home equity line of credit at 4% (but I'm not putting my house on the line, if I lose my income I'm going to need it). </p>
<p>Is it true I should make a worse financial decision so the FAOs won't get the wrong idea about turning down the subsidized loan?</p>
<p>Unsub loans are not need based. A student with no need whatsoever can take out an unsub loan. Just because it is listed in a FA package does not make it need based.</p>
<p>although Swimcat is right, you were given those loans to “meet need”. </p>
<p>I can understand the concern that if you don’t take the unsub loan, the school will assume that the family has more money to spend.</p>
<p>I guess you could take the loan out and then immediately pay it off, but you’d still have loan fees.</p>
<p>I hate to bring this up but can you really afford USC? You’re getting a subsidized loan so there must be need. With a not-huge grant can you make up the rest at that school?</p>
<p>Well, it wasn’t at USC, but freshman year my son did accept the subsidized loan and declined the unsubsidized portion. He had been awarded private scholarships (local, 1 year awards) that made the additional loans unnecessary. He was also awarded federal work study but never found a job that fit with his schedule. Sophomore year he was again awarded the full limit of unsubsidized and subsidized loans which he accepted. He was also offered work study again, but did not start a job until 2nd semester. Additionally, his school “gapped” him about $3000 freshman year, but sophomore year his total FA award hit our FAFSA EFC exactly. So at least at his college, turning down the unsubsidized loan one year did not negatively impact future years’ awards.</p>
<p>We always turned down unsub loans and it never affected my daughters aid the subsequent year. In her case, the unsub loans were only offered once she had already been offered the full amount of need based aid available to her. Actually her final year we had more unsub loans and some PLUS loans than in prior years (she took 5 years because of a minor and a certificate she did and one of her scholarships was just for 4 years and the SMART grant was also gone). We turned down the unsub loans and the PLUS. In the spring semester they had some SEOG funds come available and they gave her $1000. Turning down the loans did not change her need.</p>
<p>I would ask the school. I don’t think most schools are so capricious that they reduce future aid because you turn down a non need based loan. Our school seemed to follow a pretty formulaic approach base on EFC.</p>
<p>because you turn down a non need based loan</p>
<p>While unsub loans are avail to anyone to help with EFC, in this person’s case, it was to help fill “need”. So, indirectly, it is a need based loan…even if it’s unsub and anyone can get one. </p>
<p>That said, it’s good to know that your Ds aid wasnt’ affected. Hopefully, that is typical.</p>
<p>Right you all have put your finger on the confusion. Technically an unsubsidized loan is not need based, but USC puts these “above the line” and calls them “financial aid.” I can get a better deal than 6% interest from many other places. I just don’t want to get hurt for the following year by turning it down now, and archiemom and swimcatsmom seem to say that is not the norm.</p>
<p>Erin’s dad: USC has us at double our fafsa-calculated EFC. I should have paid more attention to the USC net price calculator which actually was not that far off from 200% of EFC. USC is very generous to low-income students, middle class (by that I mean AGI very close to the median national income in the United States - the definition of middle class): not so much. We got grants, yes, and for that I am grateful. It’s hard when you see people posting that they are paying zero out of pocket. So it will be a struggle. Our choice and decision is to find a way to make it work.</p>
<p>Well I’m glad the NPC was pretty close. The only reason I would seriously consider the Unsub loans is they would be in your child’s name. Good luck with making that work. USC is a good school.</p>
<p>I don’t think USC will “penalize” you for not taking the subsidized Staffords. A number of people turn it down as they have other options with better terms and interest rates. It’s just there because it is available by the federal government and is something that a student can take out himself without a credit check or credit history. IF something happens to the student, the loan may be forgiven and there are also a number of ways a student can “work off” the loan in the future. It’s also considered some “skin in the game” in terms of college financing to many people.</p>
<p>The fact of the matter is that many colleges are going to expect your student to take more and more responsibility for his college payments each years, so more loans may be offered each year. The government enables this by increasing the allowable amount for the student to borrow as he goes further along in school.</p>
<p>I guess I would ask the question, “if this loan is meeting need, why is it unsubsidized?” (assuming that your daughter does not have the full $3500 sub loan). And ask if turning it down (because you can get better interest elsewhere) will negatively affect next years aid. In the end, whatever our experiences may have been, only your school can tell you what their policy is.</p>
<p>In the years I have been on CC, I have never heard anyone say they were penalized for turning down any sort of loan. I have read stories of students turning down WS as freshmen and then finding the school’s policy was not ti offer it to them again (though this was not our experience at all - so different schools do have different policies), but I have never heard that about loans.</p>
<p>Ok, thanks for the advice and info. We are going to take the $3500 subsidized loan and, if she wants any spending money, it will be coming from work study. So I’m pretty sure she will be motivated to look for a job ;)</p>
<p>I had a USC financial aid officer on the phone this week and could have asked this question but I was concentrating on asking for more grant money at the time!</p>
<p>I worked at a large, public U. Not ONCE did I think a student who turned down an unsub loan should receive less money in the future because he turned that loan down. I was happy when students found ways to pay their bills with minimal borrowing!</p>
<p>The only time turning down an unsub loan would come into play would be if a student came to me insisting he needed money … I would tell him that he has available aid that he can accept.</p>
<p>My advise is not to take the unsubsidized loan, if you really dont need it. Your D will find that USC offers many paid internships, especially during the summer, that it will be easy for her to earn additional $$ there each year. DS had paid research internships at USC that paid $5000 for 3 of the 4 summers he was there .</p>
<p>Thanks MPM! Fight on! (still cannot type that without giggling, guess it will get easier over time)</p>