Wozezeka Posted March 19, 2015 Posted March 19, 2015 I got a financial aid offer from U of Michigan today, but two parts of it were loans that needed to be repayed. What is the advantage of the university offering me federal loans that I must repay, including interest? I could easily get all the money I needed from the same loan, rather than just a partial loan that the university is offering. And I would be paying it back anyway. What is the sense in offering a partial loan that I must repay and calling it financial aid? Why in the world would they offer a partial loan to cover tuition and living expenses when I can get the exact same loan, but larger to cover all expenses rather than just part. I am either misunderstanding something or this is a strange process.
Poli92 Posted March 19, 2015 Posted March 19, 2015 There could be a number of reasons: different interest rates, loan caps, miscellaneous accounting requirements on the side of the university.
hikarizx Posted March 19, 2015 Posted March 19, 2015 There is a maximum amount you can borrow for federal direct loans. They probably offered you the max.
Wozezeka Posted March 19, 2015 Author Posted March 19, 2015 They didn't offer the max and when I looked at the explanation, it said I had to pay it back. The only think I could think of is maybe the school covers interest while I attend.
hikarizx Posted March 19, 2015 Posted March 19, 2015 To my knowledge you can apply for PLUS loans but it's a separate process.
hikarizx Posted March 19, 2015 Posted March 19, 2015 They didn't offer the max and when I looked at the explanation, it said I had to pay it back. The only think I could think of is maybe the school covers interest while I attend. I would just contact the financial aid office for clarification. Kosmosis707 1
Guest Posted March 20, 2015 Posted March 20, 2015 (edited) The maximum amount for Direct Loans is $20,500 per year. Based on the FAFSA, I got that amount offered by Columbia and was told that I still have a remaining balance of unmet need of $40,000! This is only for the first year. The loans I was offered were unsubsidized, but graduate students don't qualify for subsidized Direct Loans anyways. Besides Direct Loans, the other option is the PLUS Loans, which cover the entire out-of-pocket amount. You have to pass a credit check to get those. Thanks for clarifying this...especially on the per year aspect. This was thesame amount that I had received in my financial aid award letter for American University with a remaining balance of about ~40K as well. Edited March 20, 2015 by Guest
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