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Is FAFSA required to get subsidized loans?

taverngirltaverngirl 772 replies19 discussionsRegistered User Posts: 791 Member
Apologizing in advance if this is a stupid question...
Daughter is transferring out of current school, and we were not planning on submitting FAFSA at any of the schools to which she is applying. Do we have to submit FAFSA in order to get a subsidized loan, or can anyone get those? If so, how would we go about doing that? Also, my understanding is everyone is eligible for subsidized loans (up to the max allowed) regardless of income. Is that correct?
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Replies to: Is FAFSA required to get subsidized loans?

  • cptofthehousecptofthehouse 28256 replies56 discussionsRegistered User Posts: 28,312 Senior Member
    It’s needed for both the subsidized and unsubsidized Student Direct loans and PLUS.
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  • thumper1thumper1 73280 replies3188 discussionsRegistered User Posts: 76,468 Senior Member
    edited July 10
    Yes you need to submit a FAFSA to get those federally funded loans.

    If you don’t have financial need as calculated by the college, you won’t get subsidized loans. But she can get unsubsidized loans regardless of need when you file a FAFSA
    edited July 10
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  • twoinanddonetwoinanddone 22077 replies14 discussionsRegistered User Posts: 22,091 Senior Member
    No, income is a factor for subsidized loans. Anyone can get unsubsidized loans but the subsidized portion is income dependent. You must file a FAFSA to get either.
    Once you file the FAFSA, the loans are processed through the school.
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  • taverngirltaverngirl 772 replies19 discussionsRegistered User Posts: 791 Member
    Thank you, all. We are only interested in subsidized. Is there any way for me to determine if we're eligible? Also, how quickly can the process happen, and can you access those funds at any time during the year? Back story: daughter has (just) applied as a fall transfer at five schools. She likely won't have all acceptances for a couple of weeks. We already filled out the FAFSA for her current school. Once she's accepted, and if we think we might be eligible, we will send the FAFSA to the chosen school. Can we apply those loans at any time during the academic year?
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  • cptofthehousecptofthehouse 28256 replies56 discussionsRegistered User Posts: 28,312 Senior Member
    The government will process the loans until June 39th of the school year but schools have their own rules and deadlines in processing these loans. They have to be involved, so it’s imperative that you and your student know the individual school’s deadlines. Usually, the money has to be dispensed by the last day of classes and it can be retroactive to the beginning of the school year.

    In order to get the subsidized loans, your EFC ( Expected Family Contribution) derived from FAFSa has to to be less than the School’s official Cost of Attendance, minus any other financial aid and merit money offsetting the costs. In order to get the full $6500 as a sophomore on a subsidized basis, you have to have need for at least that amount. (Need = COA-EFC). The subsidy only happens if there is need as defined by FAFSA.
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  • twoinanddonetwoinanddone 22077 replies14 discussionsRegistered User Posts: 22,091 Senior Member
    $2000 of the total loan amount ($6500 for sophomores) is always unsubsidized, so the most she'd be eligible for is $4500 in subsidized loans. Yes, you can apply for it during the school year but you, of course, have to pay your bill at the beginning of each semester. You cannot get the loans for past semesters so don't wait until late May to apply.

    Usually the loans will be on the financial aid page and you go through and accept or decline the different awards. Normally, all grant based aid is automatically accepted for the student (Pell grants, SEOG) because who doesn't want free money? but the loans you have to click to accept. If you 'decline' you can later go to the FA office and accept.
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  • calmomcalmom 20436 replies166 discussionsRegistered User Posts: 20,602 Senior Member
    If you already completed the FAFSA for one school, your FAFSA EFC tells you if you are eligible. Eligibility depends on having a FAFSA EFC that is lower than the COA for the school.

    You can't know exact COA until after admission to the schools your DD is considering, but you can certainly get a ballpark estimate based on current tuition, fees, and housing costs for each school.

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  • Madison85Madison85 10304 replies408 discussionsRegistered User Posts: 10,712 Senior Member
    What is your daughter's FAFSA EFC?

    What is the range of COA for the 5 schools she applied to?
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  • taverngirltaverngirl 772 replies19 discussionsRegistered User Posts: 791 Member
    edited July 11
    @Madison85 I just checked, and our EFC is $45,611. Which is very interesting, because Rochester expected us to pay $67,168 this coming year, and they purport to meet full need. Why the discrepancy? After a FA appeal, they threw us another $10K, but that's still a $12K difference.

    As far as the schools to which she applied for transfer, they range from $45K to $71K. Two of the higher ticketed ones she had applied to last year, and they told us verbally they would match the merit awards given at that time, which would make them affordable.
    edited July 11
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  • NJWrestlingmomNJWrestlingmom 1038 replies1 discussionsRegistered User Posts: 1,039 Senior Member
    Is U of Rochester a CSS school? If so, I don't think they would use the FAFSA EFC to determine your need.
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  • thumper1thumper1 73280 replies3188 discussionsRegistered User Posts: 76,468 Senior Member
    Rochester expected us to pay $67,168 this coming year, and they purport to meet full need. Why the discrepancy

    Rochester uses the financial information on the Profile to calculate their institutional need based aid. The Profile looks far more in-depth at your finances. Things like primary home equity are included. If your family owns a business or is self employed, it’s possible Rochester dealt with that differently as well.

    @taverngirl, it sounds like you already completed the 2019-2020 FAFSA and Profile...is that correct?

    BUT your daughter will be transferring to another college for 2020-2021...and you don’t plan to submit a FAFSA or Profile. If you don’t submit these forms, your daughter will be a full pay student at these colleges. She CAN submit the FAFSA later for the purpose of getting only the federally funded loans...which in your case sound like they would be unsubsidized.

    BUT you need to read carefully if you need institutional need based aid. If a school is need aware, and your daughter applies for admission, that school might not allow a later submission for need based institutional money.

    I guess I wonder why you don’t plan to submit the financial aid forms. If this is to get a “bump” in admissions consideration, it’s not going to be much of one for a transfer student.
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  • cptofthehousecptofthehouse 28256 replies56 discussionsRegistered User Posts: 28,312 Senior Member
    As others have pointed out, Rochester does not use FAFSA EFC to determine what they expect you to pay. Most all schools that guarantee to meet full need, define that need themselves, using PROFILE or additional questions to revise that FAFSA EFC.

    FAFSA determines eligibility for federal funding such as PELL grants and subsidized Direct Student loans. It also is a clearing house to grant access to other loans such as unsubsidized Direct loans , PLUS and possibly others. State programs and some scholarship sources also often want a copy of the SAR if need, or eligibility criteria is wanted or needed.

    Given the info you have shared, your DD is not PELL eligible. However, unless she is given a large award and depending on her new school’s COA , she looks like she is eligible for subsidy on part of her Direct loan. If she’s entering sophomore year, as @twoinanddone clearly explained, she can get $4500 in subsidized Direct Loans.

    Do understand that very very few schools guarantee to meet need as defined by FAFSA EFC.
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  • SybyllaSybylla 3439 replies36 discussionsRegistered User Posts: 3,475 Senior Member
    edited July 11
    Are you just applying to schools where the COA is less than your FAFSA EFC?
    edited July 11
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  • thumper1thumper1 73280 replies3188 discussionsRegistered User Posts: 76,468 Senior Member
    If the cost of attendance at her transfer school is less than your EFC, she will not be eligible for a federally funded subsidized loan...because she will have no financial need.

    But complete the FAFSA and see. If you do not complete the FAFSA, she can’t get those federally funded loans at all.
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  • cptofthehousecptofthehouse 28256 replies56 discussionsRegistered User Posts: 28,312 Senior Member
    Your DD’s FAFSA EFC will be the same, regardless of where she goes to school. That $45,611 figure would hold whether she goes to Rochester with its $75,186 COA, a transfer possibility of 71k, or the one with the $40k COA, or an instate Public school that has a $25k COA. Your FAFSA EFC stays the same. However your daughter’s eligibility for subsidized direct loans disappears when that COA is less than the EFC or if the cost remaining for you and she to pay is less than the $4500 Subsidized loan amount.

    Rochester using PROFILE counts things that are not in FAFSA LIKE primary hime value, business value, NCP earnings which is likely why their expected contribution from you is higher than your EFC. Other PROFILE schools likely to do the same. And schools that use FAFSA only do not tend to meet full need anyways.
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