<p>So my niece received her first complete financial package from a school she really likes and it looks like its out of reach. (This particular school had only an 80% need-met policy so we’re hoping she gets acceptances at schools where more need is met.) As we make decisions, I want to make sure I fully understand how to evaluate our financing options and, frankly, I don’t think I’ve fully got my head around it. Can you me understand better?</p>
<p><strong>Merit Scholarships</strong></p>
<p>She’s received generous scholarships (although not nearly enough to make it affordable for someone in her income level). And, although a very good student, I worry that college may have its ups and downs academically. </p>
<p>– What happens if she doesn’t meet the GPA requirements in a given semester? Is eligibility usually determined on a semester-by-semester or as a cumulative GPA?</p>
<p>– If she lost her merit scholarship, would her financial aid package be adjusted to include more grant money to offset the loss of the merit scholarship or would she need to drop out? Would she have any chance to get the scholarship back? </p>
<p>– There’s no way that she could cover even ten percent of the loss of a merit scholarship. What if she learned her grades fell below scholarship requirements at the second of the spring semester when, I’m assuming, the next year’s financial aid package had already been sent out? Am I making up problems, or do students often lose these scholarships?</p>
<p><strong>Loans</strong></p>
<p>– I’m aware of the maximum annual amounts available for Direct Subsidized and Direct Unsubsidized loans. If she didn’t take the maximum available to her one year, could she take more another year?</p>
<p>– Do the interest rate on the Direct loans lock in each year? Is it likely that you would have different interest rates for the loans every year?</p>
<p>– I believe interest begins to be assessed on the Direct loans as soon as they are taken out. Do most people pay the interest on the loans while the student is in school. It’s unlikely we could do this but I just wanted to understand. </p>
<p>– If she were given a Perkins loan, would she also be eligible for the same amount of Direct Subsidized and Direct Unsubsidized loans? (I’m not sure we would do this anyway, but I’d like to understand the options.)</p>
<p>– If you had a choice of Perkins or a Direct Loans, is one better than the other?</p>
<p>– Other than Perkins or Direct, my understanding is that the only other loan option is a Plus loans. True?</p>
<p>– If a parent does NOT have any negative marks on their credit history, can they take out a Plus loan for as much as needed to cover attendance, even if its the full amount minus grants, merit aid and other loans? (Don’t plan on doing this, just want to understand. The interest rate is awfully high.)</p>
<p>– If a parent DOES have negative marks on their credit history, I understand that they can’t they take out a Plus loan. Does this automatically allow students to take out an additional $4K-$5K per year in Direct Subsidized/Unsubsidized loans?</p>
<p>– When they speak about students with $100K of student loans, how is that possible? Are most of these students taking out Plus loans, Direct loans, and other types of loans? </p>
<p><strong>Negotiating</strong></p>
<p>If after merit aid, grants and Direct Sub/Unsub loans, we are unable to meet the difference, I realize that likely scenario is that she not attend the school. But, if we were to approach the financial aid office and ask them to increase their package, how would we do that? What is the best approach? We don’t want the answer to be “take our more in loans.” Would we ask for more grant money? More merit aid? Should we wait until other packages are in or is better to approach them as quickly as possible so that there is a chance money is still available?</p>