Financial Aid / Student Loans

Well the first thing you want to accept is any scholorships and grants since you don't have to pay them back. Well unless junior fails or drops classes, my oldest did that. :(

Then the next best is the Stafford sub which does not accumulate interest while the child is in school. Then the Stafford unsub and Perkins which do accumulate interest even when the child is in school. There is little difference between my Stafford unsubs and Perkins interest rates.

So then private loans, lord have mercy, I have some rather crass comments about them I will not share but avoid them like the plague. You can usually qualify for the parent loan which shares a lot with the Perkins and Stafford unsubs.

I would really suggest attending a financial aid seminar in your area.

And here's a website:
www.michigan.gov/mistudentaid

the award letter will tell you how much free money - grants - he qualified for, how much in loans, and how much work study. He doesn't have to accept all of it. Accept the grants, turn down the loans, if at all possible, and accept the work study. Whatever money he gets will go through the school and they will take out tuition and fees 1st. Housing and meal plan, also, if he is living on campus. He is then supposed to take that money and go to the bookstore to buy his bokks - USED!!!! BOOKS!!!! Work study is where they give him a job on campus. He earns money tax free that will not affect his eligibility for financial aid in the future. All Loans will come back to bite him inthe butt. Avoid them if at all possible. But if you must, get the stafford loan. The government pays the Interest until he gets out of school.

I wasnt clear. whatever is left after tuition and housing goes into the students pocket!

C.,

I worked in financial aid in a past life (when I was single and before I had children!). Read all of the information. First step, is the FAFSA. The FAFSA will compute a number that the school uses as your "expected contribution" - based upon your son's finances and your family finances. The award letter that comes from the school will list your expected contribution, the calculated costs of attendance (this includes all required expenses and takes into account if the student lives on campus, off campus or at home and commutes), and the "award" is meant to make up the difference.

Your son will have to attend an "entrance interview" in order to obtain any student loans. Loans that are student loans are for him personally. You may also be offered parental "PLUS loans" - these are taken out by the parent and are the parent responsibility. Grants / scholarships are "free" money that do not need to be paid back but might have stipulations or requirements attached (such as maintaining a certain GPA, being in a certain major, doing required volunteer work, etc).

If you want to message me directly and give me more info (where your son is going to school, etc) I would be happy to help you decipher it. Tracy is 100% correct that your son should take the least amount of student loans as possible and remember that student loans are for financing an education NOT financing a "lifestyle". Many students today wind up with a loan payment that is larger than a mortgage upon graduation.

Your son should also plan to work and save as much as possible during the summer and school breaks.

Cheers, C.

When I got Financial Aid/Student Loans I worked through the school. At least where I went, a smaller private college, the financial aid office worked with me on what would fit my situation the best. The student loan I recieved went straight to the school, I never saw the money/check, it just went striaght to the college bill. Six months AFTER graduation I had to start paying back the student loan, this was a loan from an outside student loan company, but I worked through the financial aid office to fill out the paperwork.

There are other loans that the student/parent has control over, helps pay for books, room & board, school payments. Then there are grants.

I would highly recommend calling the college he will be going to and ask for the financial aid office, then see if they can help walk you through everything. There are so many different types that having someone walk you through will be extremly helpful. My parents were overseas so I had to do this all on my own and it helped greatly having someone with the knowlage & background to explain everything to me.

Great advice so far. here is a little tip. there are two types of loan "awards" you son will get "subsidized" and "unsubsudized" (or grants -which are free in terms of interest)
subsidized are preferred - the interest rate is lower and you don't pay or acrue (sp) interest until you have graduated.
unsubsidized are just like going to the bank and getting a loan. You immediately being interest and it can really stack up.
Personally, I never took the UNSUB $$ when offered to me and I tried like heck to take as little subsidized as well.
It is a serious debt to incur - as one who did have to get student loans (more for my MS than undergrad) help your son do the best he can to take as little as possible, but still be sure he is covered for books, food, housing , etc.
Best

It depends on the loan. When I was in college, I had a Fanny Mae loan that I actually never saw any money, it some how paid for all my college up front, then 6 months after I graduated I began getting the bills. I fortunatey did the smart thing by listening to my father and worked just as hard while going to school so when it did come time to pay off my $20K loan, I paid it off in 4 installments of $5K so it wasn't looming over me. Plus, when I got married my hubby to be was shocked to find out how responsible I was and had no debt. What you need to do is go to the college campus and talk to on of the advisors. They will be able to give you a lot of options on how to pay for schooling, including scholarship forms and government loans that you may not know about. They do this sort of stuff all day long, so make an appointment and take your son over there:)

There are quite a few different options and it's different for a kid who is a dependent, than say an independent adult.
First I would go see a financial aid counselor at your son's school and get all the information you need.

Generally it is smart to do the following:
First of course max out grants and scholarships, that is free money.
Then you max out the subsidized loans. Those are loans that do not accrue interest while the student is in school.

Now you look at your finances. we prefer not to take out any unsubsidized loans that accrue interest while I am in school, so we pay the remaining tuition from our savings. If you don't have savings, or you money is tied up in an investment that pays more interest than the loan costs you, go for an unsubsidized loan.

All these loans will be awarded through the school and you can choose which ones you want and need and how much.

The last thing are private student loans. IMO they should be a last resort if you have no other way to pay for your education. I would avoid these if you can. Private loans you take out on your own through a bank or financial institution.

Be prepared for sticker shock. Good luck!