Reason for reduction in subsidized loan offer?

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Reason for reduction in subsidized loan offer?

Postby maine62 » Sun Apr 12, 2009 4:57 am

Before I contact the college's aid office to inquire I was wondering if anyone could explain the following situation:

My daughter was recently provided an aid package at a college that included a 10,000 merit scholarship along with a Federal Direct Subsidized loan of 3,500 and unsubsidized at 2,000. After an appeal for additional merit aid, the "new" package includes a 12,000 scholarship with a subsidized loan of 2,700 and unsubsidized at 2,800. Can anyone explain why the unsubsidized loan was reduced and the subsidized increased? Can the school really manipulate the loans this way? Her calculated need is around 17,500 (Cost of Attendance-EFC) so I assumed she would easily qualify for the entire need based subsidized loan (3,500) along with the merit scholarship.

Any assistance would be greatly appreciated. I'm just hoping to get a little smarter before calling the financial aid office.
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Re: Reason for reduction in subsidized loan offer?

Postby financialaidpodcast » Mon Apr 13, 2009 8:44 am

I assume you mean the subsidized got reduced in your question, yes?

It looks like the total amount of aid was increased by $2,000, while the loans were rebalanced. Chances are the additional scholarship funding altered the amount of aid she qualified for in subsidized loans because the scholarship essentially counts as income.

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Re: Reason for reduction in subsidized loan offer?

Postby maine62 » Mon Apr 13, 2009 9:01 am

Thank you for your response. Yes, the federal subsidized loan was originally 3,500 and reduced to 2,700. The unsubsidized went up from 2,000 to 2,800 to keep the total loans at 5,500. Adding the merit funds as income was something I had not condidered. Do all colleges follow this same policy?
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Re: Reason for reduction in subsidized loan offer?

Postby financialaidpodcast » Tue Apr 14, 2009 10:08 am

Many colleges do, but how they rebalance is left entirely to the discretion of the financial aid office.
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