<p>Unfortunately I’m not all that familiar with the finaid process, which will vary from school to school anyway. In my school’s case, students only use Federal Stafford loans – meaning the first $5000 in needs is met by a Federal loan. (Very few students will not qualify for Federal aid which, remember, does not include parental income.) After that, students at my school ignore Federal aid completely and shift to institutional aid, including loans and grants.</p>
<p>However, there is still an “Expected Family Contribution”, which is still the family’s responsibility. Federal loans, private loans, or (of course) family money can be used to pay this off. Most students presumably qualify for more Federal aid than the Stafford loan, and presumably whatever “extra” aid they qualify can be used here.</p>
<p>Again – this is the policy at my one school, and again, I’m by no means an expert or even familiar with it.</p>