<p>Okay, so I'm going to UC Davis this fall and I have been offered $2,000 in Federal Perkins Loan and $3,500 in a Stafford Loan. Here are my 3 biggest issues/questions:</p>
<ol>
<li><p>They estimated my financial aid including my transportation and living expenses, but they obviously aren't accurate. (For example, they estimated my food/living expenses to be $15,000ish, but I chose cheap living and food plans so it <em>should</em> be around $12,000, but I'm not sure!!)I also got an external $1,000 scholarship, so I don't know how that will effect my financial aid. Bottom line is, I don't know how much money I will need in the end, so how much do I take out??</p></li>
<li><p>I don't exactly know how the loans work. If I just sign up/accept both of them, do they give me the full $2,000/$3500 even if I don't need it all? Or do they only give what I need but my maximum is $2,00/$3500? (example, if I need $300 only for one quarter). If they give me the full amount and I don't need it all, what do I do with the rest? Can I return it, or use it the next year and not take any more loans out the next year if there's enough left over? I'm so confused. I just don't want to take out more than I need and pay interest on money I'm not using.</p></li>
<li><p>When is the deadline?? I've been holding this off for a while and I don't know why, but many people on my college's facebook page have been saying it passed, but it doesn't show a deadline anywhere and I haven't gotten any notifications about it in email or anything.</p></li>
</ol>
<p>Any help would be great!, thanks.</p>
<p>You should contact FA office directly for specific answers, especially concerning deadlines, but most schools will split the award amounts up by semester or quarter to spread it out over the year. If the funds exceed your directly billed amounts there will be a mechanism to get you the cash. If you really don’t need the loans, why go in debt? However, if they are subsidized loans and interest doesn’t accumulate there is no harm in taking that free money and saving or investing it for the future, especially if your FA changes in the future and you need it. I know of at least one student who took unneeded loans and made some astute investments, then paid back the loans when he graduated with a sweet profit. Don’t go to Vegas or take foolish risks.
Also, be aware that outside scholarship may affect your FA when it arrives at the school, you should report it.</p>
<p>The way it works for federal loans is that a school submits an official Cost of Attendance (COA) that is used as the figure needed for a student to go to school there, and federal loans are permitted up to that amount for the given school, less other aid/awards given. If you can get away with paying less, good for you. You are still entitled to the loans. Since the loans are subsidized, you can stash them interest free and pay them off when you are done with school. Keep them in a separate account and don’t draw on them, so you don’t have to include the balances each year when you reapply for financial aid, as student assets are hit up at 20% on the FAFSA. </p>
<p>It really depends on how disciplined you are with money. For some of my kids, and maybe myself, having that money there would be a great temptation to overindulge. For others, it may be an investment opportunity. So, YMMV, depending on how you handle money.</p>
<p>Why wouldn’t the money in a separate account in the student’s name not be considered “student assets”?</p>
<p>The amount in student accounts that came from financial aid is not reported on fafsa. It’s not necessary to put financial aid amounts in a separate account if you can prove the source of the funds but it would be cleaner to do so.</p>
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Why not? If you borrow money but put it into your bank account; you would need to report it on next year FAFSA</p>
<p>The way the rules work, you don’t have to include proceeds from student loans, financial aid, merit money as student assets. But if you start mixing money, it might turn out you did spend those funds, and just replaced them with other money, say from a job, a gift, whatever. Those monies sitting as assets on the day a student completes FAFSA are reported. It makes it a lot easier if selected to be verified to show fin aid funds going into an account and then just sitting there. In an audit situation, once those funds are spent, you can’t just replenish them is the way it works. The chances of an audit are small, but it’s always smart to be prepared. You don’t want trouble in this area, especially if you are going to be wanting future financial aid.</p>
<p>The loans are based on what they think you need. They will give you all those amounts awarded if you accept the loans, usually 1/2 for each semester, sorry I don’t know how it works for trimester system, maybe they disburse in thirds.</p>
<p>If you actually spend less, then you get to keep the extra. You will likely need it for supplies like books (which can be very expensive) and office supplies. Part of the money is usually meant to help with trips home and a computer. My daughter used her extra money for personal and household supplies. You will need clothing from time to time. At Davis it would be very good it have a bike that will last you 4 years so you may use the money for that and an expensive state of the art lock.</p>
<p>As mentioned, you aren’t paying interest on subsidized loans until after graduation.</p>