With GradPLUS, why is Financial aid still so complicated?

[zerofact0r]

I was just doing some thinking.  you know, with GRad PLUS and them allowing you to borrow up to your budget (Which in terms of financial aid is almost like a blank check), what is the point of the financial aid process to still be using so many forms, etc.  I'm lucky and the only two schools I'm still considering only require the FAFSA, but even still.  Stafford Loans aren't exactly God's gift to law students. I just think that with so many options now it's all too much of a hassle.

[mugatu]

I'm pretty sure it revolves around the Stafford loans, especially the subsidized version.  The stafford loans are so much cheaper that they want to make sure you only get them if you need them.

[mugatu]

I'm pretty sure it revolves around the Stafford loans, especially the subsidized version.  The stafford loans are so much cheaper that they want to make sure you only get them if you need them.

And what measure, pray tell, is used to decide if "you need them"? TYIA

If the school budget is $50K, and your EFC is $50K, then you don't "need" them.  This is on a sliding scale, so if your EFC is $40K, then you would only "need" $10K of Stafford loans.

[Groundhog]

I'm pretty sure it revolves around the Stafford loans, especially the subsidized version.  The stafford loans are so much cheaper that they want to make sure you only get them if you need them.

This is in terms of interest rates, right? The Stafford has the low but somewhat flexible rate (I think currently at 6. which is lower than GPLUS' 8%, right?

[mugatu]

I'm pretty sure it revolves around the Stafford loans, especially the subsidized version.  The stafford loans are so much cheaper that they want to make sure you only get them if you need them.

And what measure, pray tell, is used to decide if "you need them"? TYIA

If the school budget is $50K, and your EFC is $50K, then you don't "need" them.  This is on a sliding scale, so if your EFC is $40K, then you would only "need" $10K of Stafford loans.

Thanks for the quick response!

So, lets say my school budget in a hypothetical situation is 47210 and my bullcrap EFC is 24000. I "need" 23210 above my EFC level. So I'm going to max out my stafford eligibility -- but the question is: am I getting 18500 in unsubsidized (boooo!) or 12000 unsubsidized + 8500 in subsidized (hooray!)?

the latter.  you can then borrow as much (up to the school budget) as you need to fill in the difference from GradPLUS.

I'm pretty sure it revolves around the Stafford loans, especially the subsidized version.  The stafford loans are so much cheaper that they want to make sure you only get them if you need them.

This is in terms of interest rates, right? The Stafford has the low but somewhat flexible rate (I think currently at 6. which is lower than GPLUS' 8%, right?

As far as I know, Staffords are locked at 6.5% and GradPLUS at 8.5% (but banks give you a kickback on the GradPLUS if you pay it by auto-deduction, electronically, etc.)  This happened a year or two ago based on a congressional mandate.

[mugatu]

I'm pretty sure it revolves around the Stafford loans, especially the subsidized version.  The stafford loans are so much cheaper that they want to make sure you only get them if you need them.

And what measure, pray tell, is used to decide if "you need them"? TYIA

If the school budget is $50K, and your EFC is $50K, then you don't "need" them.  This is on a sliding scale, so if your EFC is $40K, then you would only "need" $10K of Stafford loans.

Thanks for the quick response!

So, lets say my school budget in a hypothetical situation is 47210 and my bullcrap EFC is 24000. I "need" 23210 above my EFC level. So I'm going to max out my stafford eligibility -- but the question is: am I getting 18500 in unsubsidized (boooo!) or 12000 unsubsidized + 8500 in subsidized (hooray!)?

the latter.  you can then borrow as much (up to the school budget) as you need to fill in the difference from GradPLUS.

Cool. Now how did you reach that conclusion? Thanks again for all your help.

I guess i don't know.  I thought everyone was eligible for the subsidized loans.  If that isn't the case, I can't help you.

[Groundhog]

I'm pretty sure it revolves around the Stafford loans, especially the subsidized version.  The stafford loans are so much cheaper that they want to make sure you only get them if you need them.

And what measure, pray tell, is used to decide if "you need them"? TYIA

If the school budget is $50K, and your EFC is $50K, then you don't "need" them.  This is on a sliding scale, so if your EFC is $40K, then you would only "need" $10K of Stafford loans.

Thanks for the quick response!

So, lets say my school budget in a hypothetical situation is 47210 and my bullcrap EFC is 24000. I "need" 23210 above my EFC level. So I'm going to max out my stafford eligibility -- but the question is: am I getting 18500 in unsubsidized (boooo!) or 12000 unsubsidized + 8500 in subsidized (hooray!)?

the latter.  you can then borrow as much (up to the school budget) as you need to fill in the difference from GradPLUS.

Cool. Now how did you reach that conclusion? Thanks again for all your help.

I guess i don't know.  I thought everyone was eligible for the subsidized loans.  If that isn't the case, I can't help you.

Hmm...I just found this:

"Subsidized loans are awarded based on financial need. You will not be charged interest before you begin repayment or during periods of deferment. The federal government “subsidizes” the interest during these times."

[mugatu]

Then the definition of "need" has to simply fit your circumstances.   

[Groundhog]

For schools committed to THE FREAKING LAW, you'd think they would make more specific and useful statements than "Subsidized loans are awarded based on financial need." O RLY? No definition, no link to a definition, nothing. Bummer.

I'm guessing politicians or someone decide the total amount of money to be allocated in some giant federal budget, and then finaid officers have to distribute those to those who need it "most" relative to their classmates.