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Parents Cannot Meet EFC

oscar63oscar63 Registered User Posts: 371 Member
When parents cannot meet the EFC a college assigns, ( they have not saved for college at all) is the student able to negotiate this with college or does it just end up being a bigger loan the student needs to take out? Thank you!
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Replies to: Parents Cannot Meet EFC

  • intparentintparent Registered User Posts: 36,885 Senior Member
    You can only borrow $5,500 yourself (federal loan limit for frosh), and slightly higher amounts each of the next 3 years. Colleges don’t care if parents didn’t save or don’t want to part with current income.

    Most students in that situations up doing one or a combo of these:

    - Living at home and attending a community college or a 4 year college that is close enough to commute to.
    - Taking semesters off sometimes to work and earn money to pay for the next semester.
    - If the student has good stats, looking for schools where they can get good merit based scholarship money.
    - Taking out some private loans with parents co-signing. This is not recommended - private loans have a lot fewer protections for the borrower, and you (or your parents) can end up hamstrung financially by them.
  • thumper1thumper1 Registered User Posts: 76,061 Senior Member
    How much is your EFC that your parents can’t pay?
  • oscar63oscar63 Registered User Posts: 371 Member
    12,000 is the EFC
  • spqr70njspqr70nj Registered User Posts: 383 Member
    I wish our EFC was $12,000.
  • thumper1thumper1 Registered User Posts: 76,061 Senior Member
    Does that EFC include college aid that already 8nclides the Direct Loan?
  • oscar63oscar63 Registered User Posts: 371 Member
    @intparent What do you mean fewer protections in private loans? Then what type of loan is best to take?
  • intparentintparent Registered User Posts: 36,885 Senior Member
    The best types of loans, assuming you or your kids are not internationals, are federal student loans. Direct subsidized and direct unsubsidized loans. There are direct PLUS loans for parents, too, but again... sticking with the federal direct loans for students is the most prudent path. Here is a website that shows a comparison of the different types of loans and some of the features of them:

    https://studentaid.ed.gov/sa/types/loans/federal-vs-private

    Most of the horror stories you hear about high amounts and/or situations where students are really in trouble with loans are when private loans were taken out.
  • thumper1thumper1 Registered User Posts: 76,061 Senior Member
    @oscar63

    Does this unaffordable EFC already include financial aid that includes the federally funded Direct Loan? Please answer that question.
  • oscar63oscar63 Registered User Posts: 371 Member
    @thumper1, not including financial aid
  • oscar63oscar63 Registered User Posts: 371 Member
    @intparent,Thank you very helpful. Do parents need to cosign federal student loans?
  • intparentintparent Registered User Posts: 36,885 Senior Member
    No, they do not. Those loans are entirely the student's responsibility to take out and pay back. (Not that parents don't work with the student on making sure the paperwork gets done, etc in some cases). But the federal student loans are limited to $5,500 freshman year, $6,500 soph year, and $7,500 each year for jr and sr years.
  • thumper1thumper1 Registered User Posts: 76,061 Senior Member
    Ok...so for freshman year, you are short $12,000. How much of that CAN your parents pay? Your freshman Direct Loan is $5500...so you have $6500 left to fund. Can your parents pay that amounts any portion of it?

    Could they pay $700 a month or so...some schools have a monthly payment plan.
  • sybbie719sybbie719 Super Moderator Posts: 22,607 Super Moderator
    @thumper wrote:

    Ok...so for freshman year, you are short $12,000. How much of that CAN your parents pay? Your freshman Direct Loan is $5500...so you have $6500 left to fund. Can your parents pay that amounts any portion of it?

    This is only the case if the $5500 is not already included in the student's financial aid package. This would happen at a school that meets 100% demonstrated need and also has a no loan policy when it comes to distributing aid.
  • SybyllaSybylla Registered User Posts: 3,410 Senior Member
    OP is the parent, maybe he can outline the award?
  • oscar63oscar63 Registered User Posts: 371 Member
    Thank you all for your help!!
This discussion has been closed.