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Is Subsidized Loan Eligibility Linked to Pell Eligibility?

mom2012and14mom2012and14 Posts: 888- Member
Do you have to be Pell Grant eligible to be eligible for a subsidized student loan or is the EFC higher?

Pell grant was approximately related to a $4000 EFC...

If your EFC is higher, what's the cutoff for being eligible for a subsidized student loan?
(I checked fafsa.gov and could not find anything there or anything on both children's SARs)
Post edited by mom2012and14 on

Replies to: Is Subsidized Loan Eligibility Linked to Pell Eligibility?

  • swimcatsmomswimcatsmom Posts: 14,942Registered User Senior Member
    There has to be financial need to be eligible for a Subsidized Stafford. So if the COA was 20,000, and the EFC was 4,000 then there would be 16,000 need. If there is a Pell of 1500 then that would reduce the need to 14,500. If there are no other grants/scholarships/awards then there is 14,500 need so the student is eligible for a subsidized Stafford (max subsidized is $3500 for freshman standing). But if there is a $12,000 scholarship in there it would reduce the need to 2,500 so there would only be $2500 subsidized eligibility.
  • mom2012and14mom2012and14 Posts: 888- Member
    When you say need-- do you mean there needs to be unmet need to receive subsidized funds? (when we request loans-- we receive the unsubsidized type-- which we always decline given the interest rate)

    During freshman year, there was about 2000 of unmet need but fin aid officer told us we didn't qualify for subsidized borrowing b/c of our income level was too high as was the efc...we are way beyond pell status...

    1) does pell ineligibility make one equally ineligible for subsidized loans or is there no relationship between the two?

    2) what if need is being met with work study-- can one request instead to have an unsubsized loan?
  • swimcatsmomswimcatsmom Posts: 14,942Registered User Senior Member
    My daughter's first year she did ask for part of her WS to be replaced with subsidized loans, which was done with no problem (she did not already have the max in sub loans). I don't know if this would vary by school. I wouldn't think so, but then I am surprised that you would not qualify for sub loans if there was unmet need. I am pretty sure Pell eligibility is not a requirement for sub loans. Hopefully Kelsmom might see this and chime in.
  • momofthreeboysmomofthreeboys Posts: 11,364Registered User Senior Member
    We're not even close to Pell eligible but for S1's freshman year he had a teeny tiny bit of his Stafford subsidized and never since. He does get some W/S every year which he likes because it's cash in his pocket. This is a college that does not meet full need.
  • anxiousmomanxiousmom Posts: 5,281Registered User Senior Member
    My son has had stafford and perkins subsidized loans (and never had ANY unsubsidized loans), and we have an EFC of about 23k. This is at a school that meets 100% need.
  • mom2012and14mom2012and14 Posts: 888- Member
    Anxious Mom Wrote: " My son has had stafford and perkins subsidized loans (and never had ANY unsubsidized loans), and we have an EFC of about 23k. This is at a school that meets 100% need. "

    That's interesting....first year, D's EFC was over 30K, college aimed to meet full need and included 3200 in unsubsidized loans in that package...we asked for subsidized loans and were told we didn't qualify for those given the efc and income level...so they were meeting the unmet need but with the unsubsidized loans....we just paid the difference out of pocket-- note: the COA includes at this school's COA: $2000 in spending money/travel expense and 1100 for textbooks... declining the loan meant less pocket cash that year to spend and we were very successful finding used textbooks online...(school also indicated D wasn't eligible for work study...which is why I thought maybe there's some connection to Pell???)
    Second year, EFC a bit under 30k, same story-- we again asked for the subsidized loans- and were told no ..we didn't qualify... I don't know what that meant, since each year the difference between COA and EFC yielded a finaid package which included $3500 in UNsubsidized loans - which we declined both times..the interest rate being a bit too high

    So I'm not yet understanding what are the criteria to qualify for a subsidized no-interest-while-in school-loan-- since anxious mom had a high EFC and was in a school meeting full need too.


    ?? Doesn't look like the "unmet need" that swimcatmom spoke of is what our fin aid office is doing..??


    Any other thoughts as to what makes a student eligible for subsidized loans?
  • thumper1thumper1 Posts: 35,664Registered User Senior Member
    DS has unsubsidized loans all the way. Even his senior year when little sister was in college as well...his loans were unsubsidized.

    DD (the little sis) has had ALL subsidized loans...even the year that she and her brother were both undergrads at the same time. Even THIS year when she is the only kiddo in college in the family. Go figure. I guess we had financial need at HER school but not at DS's.

    We have NEVER qualified for a Pell grant for either kiddo.
  • JustAMomOf4JustAMomOf4 Posts: 4,563Registered User Senior Member
    You absolutely do NOT need to qualify for a Pell to get a Subsidized stafford loan.
    My understanding is if COA > EFC + grants/scholarships then you will qualify for a subsidized loan.
    I don't think it has anything with a school meeting full need or not and since it's a federal program, you are entitled if you demonstrate need through the fafsa.
  • JustAMomOf4JustAMomOf4 Posts: 4,563Registered User Senior Member
    Addendum to my post:
    from [url=http://www.finaid.org:]FinAid! Financial Aid, College Scholarships and Student Loans[/url]
    All Stafford Loans are either subsidized (the government pays the interest while you're in school) or unsubsidized (you pay all the interest, although you can have the payments deferred until after graduation). To receive a subsidized Stafford Loan, you must be able to demonstrate financial need. About 2/3 of subsidized Stafford loans are awarded to students with family AGI of under $50,000, 1/4 to students with family AGI of $50,000 to $100,000, and a little less than 10% to students with family AGI over $100,000.
    Apparently income is a factor - as well as EFC.
  • swimcatsmomswimcatsmom Posts: 14,942Registered User Senior Member
    ^^^But I interpret that as being is because the higher income people will have a higher EFC so less need.

    I have never read that there is an income cut off for a sub loan, always thought it was just if there was need. I would be interested to know how schools determine this.
  • JustAMomOf4JustAMomOf4 Posts: 4,563Registered User Senior Member
    ^ that could be. Don't really know - maybe kelsmom can explain.
  • thumper1thumper1 Posts: 35,664Registered User Senior Member
    Then help me understand why one of my kids HAD need and the other did not...schools were virtually the same cost and their EFCs were almost identical. Both had unmet need...same year...one had subsidized loans and the other did not. Go figure.
  • JustAMomOf4JustAMomOf4 Posts: 4,563Registered User Senior Member
    That seems very odd. I don't think colleges have a limit on the $$$ for Sub Staffords like they do Perkins loans. I don't know what they would have to gain by not awarding a Sub Stafford if they can.
    Guess it's a question for the experts.
  • kelsmomkelsmom Posts: 12,500Super Moderator Senior Member
    Eligibility for sub loans:

    COA - EFC - all other aid (including any work study awarded before sub loans are awarded)

    If student declines work study when school policy is that work study is awarded prior to the awarding of sub loans:

    COA - EFC - all other aid (student will not receive work study in this case). If declining work study would result in increased eligibility for a sub loan, student would need to inform school that she wanted to make this swap, because most schools won't automatically offer when work study is declined (although they should switch any accepted unsub for sub in such a case, but to assume it will happen automatically is not wise on the part of the student). NOTE: very often, declining work study doesn't result in increased sub eligibility because sub is already at max for year in school.

    Sub loans are limited to the max for year in school, though. Freshmen can only receive $3500 sub.

    That doesn't mean freshmen WILL receive $3500 sub. They can receive a max of $5500 in Stafford loans, of which UP TO $3500 MAY BE subsidized. So say that COA-EFC-aid=$2000. Even though a freshman "can" receive $3500 in sub, this freshman would only receive $2000.

    Eligibility for unsub loans:

    COA - all other aid

    Unsub is that LAST thing awarded. The EFC is not in the picture when awarding unsub.

    A freshman may receive up to $5500 in sub+unsub loans. In the case where the student could only receive $2000 sub, he would receive $3500 unsub.

    The total of all aid awarded cannot exceed the COA.
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