Expected Contribution Question

[LilyGrey]

After filling out FAFSA (which did not include my parent's information), they determined that my expected family contribution will be over $17,000.00.  I wasn't really concerned about this until after I attended a financial aid seminar.  Apparently, students can only borrow the cost of tuition and expenses less their expected contribution (and any scholarship/grant money) in federal loans.  I have tried to contact the financial aid office to discuss my concerns, but they don't seem to understand why I'm worried about having $1888 less a month to spend on things like food, rent, electricity, etc.  During 2007, I worked at least 60 hours a week, but I won't be working after July, I live in New York City and don't (and can't) have this money saved, so what am I supposed to do. 

I've looked into private loans (which everyone suggests to stay away from), but even they will only loan out the cost of tuition and expenses less someone's expected contribution. 

Am I the only one struggling with this?  Does anyone have any suggestions?

[greenie]

I thought everyone could get stafford loans?

[LilyGrey]

As far as I know, almost everyone can take out Stafford loans (that's only a max of $20,500 for both, nonetheless).  But I'm talking about the Federal Graduate Plus loans.  With the Plus loans, I was told by Brooklyn's financial aid office that you can only borrow the cost of tuition and expenses (determined by the school, lets say $63,000) less your expected contribution (determined by FAFSA; mine is $17,000) and less other financial aid (any scholarship/grant money and the Stafford loans).  So I'm left with $17,000 that I need to go to school (or to eat, more importantly), that I can't receive from the Plus loan, and that I don't have saved.  I can budget adjust for certain things, but I don't want to start the year out knowing I'm already $17,000 short.

I just feel like this process doesn't make much sense.  Am I missing something here?

[greenie]

And you talked to your schools' financial aid office and they didn't have any advice?

[LilyGrey]

I did talk with the financial aid office, but they surprisingly didn't really understand why I was worried about getting $46,000 in Plus loans, Stafford Loans, scholarships, etc., when they estimate that it should cost me approximately $63,000 for tuition, books, and living expenses.  And I don't make a crazy amount of money, so I'm assuming that this is a problem for a lot of students.

But yes, I received two different handouts from two different schools stating that you are only eligible for a Federal Graduate Plus loan in the amount of your "unmet cost", which is the cost of attendance, less your expected family contribution, less any scholarships, grants, Stafford loans, Perkins loans, or work study.  (I wish I could upload the page).

[hbb]

With the Plus loans, I was told by Brooklyn's financial aid office that you can only borrow the cost of tuition and expenses (determined by the school, lets say $63,000) less your expected contribution (determined by FAFSA; mine is $17,000) and less other financial aid (any scholarship/grant money and the Stafford loans).

This is not correct.

Brooklyn's financial aid booklet:

Students may be eligible to borrow Graduate Plus Loans up to the cost of
attendance (less other aid).

The Department of Education:

How much can I borrow in Direct PLUS Loans?
There are no set annual or aggregate limits. You may borrow up to your full
cost of attendance, minus any other financial aid you receive (including
Direct Subsidized Loans, Direct Unsubsidized Loans, scholarships, and
certain fellowships).

Neither of these sources mention EFC as a consideration. As GradPLUS loans are not need-based, your EFC plays no part in determining your eligibility.

[Budlaw]

You misheard or they mis-told you.

You take any grants or scholarships off the top.  Then you take subsidized Stafford.  Then you take unsubsidized Stafford.  Then a Perkins, if your school offers them. THEN you take GradPlus or a private loan.  You can borrow the entire cost of attendance without paying any money.

The only time EFC matters is if you're an undergrad student trying to take out loans. Its a totally different ball game with grad school funding. I really think you're worrying about nothing. So what if you have to take out a private loan instead of a GradPlus loan? 

[Miss P]

OP, I suggest you talk to Nancy Zahzam in the Brooklyn financial aid office.  She is usually helpful and should assuage your fears.

So what if you have to take out a private loan instead of a GradPlus loan? 

For students who plan to do public service work after graduation, there is a big difference between private loans and government-backed loans because only the latter are covered by the College Cost Reduction Act (the new federal loan forgiveness program).

Also --

Private loans can actually be better deals for some borrowers than GradPlus.

This is generally not true since the advent of GradPLUS loans.  It is also especially unlikely for the 2008-2009 academic year given the current credit crisis.  Some private education lenders are even closing up shop due to declining interest rates and subsidies, etc.

[DGbelle]

Stafford Loans are guaranteed no matter what your income. With a high EFC however, you may only get unsubsizided loans. The rest of your financial aid will depend on your budget (tuition, books, housing etc, varies based on school obviously) and your EFC. So everyone will have a different PLUS loan amount offerred to them. Your school can give you a detailed description. I would suggest setting up a one on one meeting with some from Fin. Aid and explaining your situation and see if they can do an income adjustment since you won't actually be working that much or at all during school.