Law School Discussion

Question Regarding Fed Subsidized Loan

Big Slick

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Question Regarding Fed Subsidized Loan
« on: December 28, 2006, 11:37:29 AM »
Ladies and Gents

Please comment.....

It is my understanding that the amount person can borrow as a subsidized loan depends on the person's need.  I interpret this as, if more $ the person makes, less $ the person would be able to borrow as a subsidized loan (please correct me if I am incorrect).

I believe FAFSA requires applicant's current year income tax return.  For 2006 tax year, it looks like my wife and I will have to report $100K+ as "Gross Income" before any deduction without any dependent.

Having said this, my concern is that once I start law school in Fall of 07, income of my house hold would plummet by about 60% because I will no longer be working full time (if at all).

Does whoever that determines one's eligibility of the subsidized loan take this into account?  In another word, tax return before the start of the law school does not seem to be an adequate measure in determining person's eligibility of the subsidized loan.


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Re: Question Regarding Fed Subsidized Loan
« Reply #1 on: December 28, 2006, 11:39:47 AM »
We're in exactly the same position (well, except that it sounds like we won't be hit quite as hard as you... since the proportion of our salaries is reversed).  I'm interested in seeing what the responses are to your question.

Re: Question Regarding Fed Subsidized Loan
« Reply #2 on: December 29, 2006, 08:31:51 AM »
The financial aid office at the school you end up attending calculates your EFC.  Google it, and you can get some info on how it works. 

Income is only one factor.  For instance, lets say you made $25,000 last year at your job and you have three kids.  BUT - you have a home with 100% equity, a paid-off car and $100,000 in the bank.  Chances are you won't qualify for the best need-based aid since you are cash/equity heavy despite a low income.

I had a great year in 2006 financially, but I also paid off all the debt that I could (car, credit cards) - so I am relatively cash poor, despite a good income.

The people who should fair the best are students who are independent of their parents as far as the government is concerned, low income, low cash, no assets.