Question about loan or something idk

<p>Okay, so some family friend has some daughter with inferior grades but she is gassed because apparently she has signed up for some college student loan or something and feels the need to flaunt about it. Apparently it is low interest, and some sort of loan from a bank.... she is senior not even in college</p>

<p>Of course my parents get wind of this stupidity and are now bugging me to hell to get this "free money." I told them to wait until FAFSA in 1/1/11 but they are pushing this..</p>

<p>First of all, what the **** is this girl talking about??? Is she getting a loan or is this a scholarship or a grant or wth</p>

<p>Also how does financial aid work exactly? Do they give free money to attend certain schools or you just borrow and you have to pay all of it back?</p>

<p>And is this loan or FAFSA better???</p>

<p>FAFSA doesn’t GIVE you any money. It just gives you a number which indicates what federal aid you’re eligible for.</p>

<p>It just sounds like this student is getting a private student loan. </p>

<p>Why do your parents think that a loan is “free money”???</p>

<p>It sounds odd. If she is a senior in HS and not even a college student yet, then she is not eligible for any federal aid yet. She could have been given a preliminary award based on estimated financial information they have provided the school? Some schools will do that. many will wait to give FA awards until after you have filed the 2011-2012 FAFSA which is not available until January 1st.</p>

<p>A loan is not free money. I don’t know why anyone would be bragging about getting a loan. Some federal student loans are lowish interest. The subsidized Stafford is around 4.5% for this school year. Sub Stafford loans for the 2011-2012 school year will be around 3.6% I think. Sub loans are need based and if you are eligible for those they will be awarded to you by your school after you file FAFSA next year.</p>

<p>

Need based aid depends on your family’s financial situation. Aid at most schools is applied for by filing FAFSA. When you file FAFSA you report income and assets and it produces a number called the EFC (estimated family contribution) which is sent to the schools you have selected. The schools use the EFC to determine what aid, if any, you are eligible for. If your income is low and gives you a low EFC you may be eligible for federal grant money such as the Pell grant, subsidized loans such as the stafford loan, and/or work study. If your income is higher you may not be eligible for anything other than loans. Grants such as the Pell do not have to be paid back. Loans do have to be paid back.</p>

<p>Grants and scholarships are the only “free” money out there and that’s what you’re looking for. This sounds like a pre-qualification for a private loan. All student loans have to be certified by the school (total aid, including loans, can’t exceed the school’s cost of attendance). Tell your folks to relax unless they’re 100% sure that this is only a pre-qualification and comes with no strings attached (I’d still be very careful though)…you’re on the right track and you’ll want to file FAFSA and your state’s grant aid application and receive your award letters from colleges before you make any loan decisions. </p>

<p>If your folks need a brush-up on how financial aid works, this site has a wealth of info including loan calculators:
[FinAid</a>! Financial Aid, College Scholarships and Student Loans](<a href=“http://www.finaid.org%5DFinAid”>http://www.finaid.org)</p>

<p>Tell your parents that for you to borrow large amounts of money (not a good idea) that THEY will have to co-sign and be responsible for the amount if you are unable to pay the loan back (that should cool their jets).</p>

<p>What is YOUR situation? What are your stats? Where are you applying? </p>

<p>If you use a good strategy, you shouldn’t need big loans to go to college.</p>