Does Scholarship Money Affect Perkins or Stafford Loan Amounts?

[LionelPutz]

If a school offers you merit scholarship money after first offering you nothing, can they then take away a Stafford or Perkins loan they previously offered you?

[COmom]

Stafford are guaranteed, provided you aren't going over the cost of attendance at the school.  Basically the COA is the max total amount of money allotted for you for that year for LS.  So if the COA was $30K and you received a scholarship for $10K, stafford loans of $18.5K and a perkins for $6K - one of either the stafford or perkins would be reduced to total $30K (probably the perkins loan though I don't know for sure).  Hope that makes sense.

[ocdb8r]

This is almost correct.  It's COA minus expected contribution = total aid you may receive (including all grants, loans..etc.)

But remember, Cost of Attendance includes tuition, housing, books, misc. expenses and at most schools you can even petition to have it increased if you have a good reason.

[LionelPutz]

That's what I thought also, but in this case even with the scholarship+Perkins+Stafford I'm $10,000 under COA. Do schools have some incentive not to offer as many Perkins or Staffords?

[COmom]

I doubt the school cares where they get their money from.  The max loan amount comes from the govt - Stafford and Perkins are govt loans.  Imagine all schools charging $60K a year for tuition because they know you can borrow unlimited amounts of money from the govt for school.  Not a very good idea for the govt or the students coming out of school with so much debt...