What does a typical government aid package look like for grad school?

[11Q13]

I'm 2 for 2 so far on my acceptances, and one sent financial aid info along with my acceptance letter offering a merit-based 65% tuition scholarship which I was sure pleased with. Then I remembered way back in undergrad I found out the government aid at the same time as the institutional aid, so I knew what kind of overall package I had. It seems that I won't hear back on the government aid for at least a couple weeks, so I'm wondering if there are any pretty standard grants that come along with the FAFSA so I can begin planning. If it matters, my total income on my tax return this past year was 0, I'm independent, and I'm applying to universities in several states none of which are my home state.

[jenali]

Depending on what your program is, you won't get much in the way of government aid.

That is, many PhD programs will cover your 'fully' (where by 'fully' I mean to a less than ideal standard of living, but you won't die either) such that you won't be eligible for much of anything from the government. Depending on what you're doing you'll have to revise your FAFSA to account for institutional $ to find out if you're eligible for much else.

Good luck!

[11Q13]

I forgot to mention I guess that this is only for a Master's not a PhD.

[Diverchica]

I can't offer much advice, but I'm in the same boat!! expensive program, awaiting my FAFSA package

[DeepShadeofBlue]

I've been browsing around this forum, but I'm not quite sure where to find an answer for this question.

I know that Stafford loans cap out at $20,000 a year, but are there other federal loans I would be eligible for? I just spoke with the Financial Aid Office at the school I hope to be enrolling in, and they mentioned Graduate PLUS Loans. Does anyone have any advice on when to fill the PLUS loan application out? As in, wait for information regarding Stafford Loans first, and then apply? Or go ahead and do the PLUS application now?

If it makes any difference, I know for a fact that the Stafford Loans will not cover all the tuition ($1,300 per credit --> 2 year program of 39 credits = 50,000 +) And course, there are other expenses: housing, for one.

Does anyone have any advice in general?

[fj20]

I have a related question, I think: I filed my fafsa a couple weeks ago, before knowing which school I"d be attending, so obviously I didn't give them any info about the amount of tuition I'd be required to pay in the fall. So my question is, do they need this info in order to decide how much aid to give me? Should I / Can I give it to them after having filed my FAFSA? (I imagine this is a common problem, since the deadline (isn't it?) is March 1, which is before many people know where they'll be attending school.)

[bluedevil527]

Unfortunately for grad students, the FAFSA doesn't really make you eligible for anything but loans. Things like the Pell grant are not available for grad students. The base rate for graduate students for loans is $8,500 a year with a max of $20,000. Only $8,500 of this can be subsidized and the rest will be unsibsidized. Now, each school is required to come up with a budget for the student. This budget will vary by school and will affect what you are eligible for. You cannot go above your budget but where I work, we do not count a stipend toward the budget but we do count tuition remission. But here, the budget is well above what the tuition is so graduate students are able to usually take out at least the $8,500.

I think it is a common misconception that the government says "okay, this is how much X student is eligible for" and sends that information to the school. What happens is that the FAFSA information is sent to the school and the important information is the Estimated Family Contribution (EFC). The school looks at the EFC (and sometimes other information depending on the situation) and then uses their budget and tuition information to determine what the student is eligible for. Of course the school has to follow government guidlines like the max for subsidized loans etc., but a lot of what you are awarded depends on the school you are attending and what they decide is an appropriate budget for a graduate student at their school.

I hope this helps, I'm not the best at explaining things... let me know if you have other questions!

Oh and in regards to the PLUS loan, I would personally wait until you hear about your full funding package because it can be annoying to cancel/pay back the loan after you take it out, but if you really think you'll need it, there is probably no harm in doing it now.

[bluedevil527]

I forgot to mention the Perkins loan. There is a limited amont of funding for Perkins loans at schools and only goes to students with extreme financial need. This is the best loan you can get although it is usually a smaller amount. It is a subsidized loan with a 9 month (as opposed to 6 month) post graduation grace period. It also has only a 5% interest rate as opposed to the standard 6.8%.

[murpstud]

By budget are you referring to the cost of attendance? I thought that federal loans were out of the realm of the school's authority. With an EFC of zero, I should be eligible to take out 20k/year, minus other aid. So my CoA is 22k/year, if I don't get any other aid, I should be able to take out 20k to pay for tuition and living expenses.

[bluedevil527]

By budget are you referring to the cost of attendance? I thought that federal loans were out of the realm of the school's authority. With an EFC of zero, I should be eligible to take out 20k/year, minus other aid. So my CoA is 22k/year, if I don't get any other aid, I should be able to take out 20k to pay for tuition and living expenses.

The budget varies from school to school but it usually includes cost of attendance plus some living costs. Like where I work, the budget is usually about $15,000 more than the cost of attendance (the cost of living here is very, very low). So the budget is almost always more than the 20k you would be eligible for. But remember that's for an entire year and if you are taking Fall, Spring, and Summer classes, it will be split into three disbursements so you won't get it all at once. If you only take Fall and Spring, then it will be split into half. The government does not allow the full loan to be disbursed at once. And federal loans are completely within the realm of the school's authority because there are limits to how much a student can receive and the school has to determine if the student is getting too much and this is especially important in determing when students are eligible for subsidized or unsubsidized loans. That being said, your budget (in my experience) will be more than enough to allow you to take out that full loan amount. If for some reason your budget is not enough, schools are also allowed to make special cases for students if the student can prove that he or she needs the financial help.

I would look at your school's financial aid website because they probably explain which things can affect your federal funding. Occasionally you might even have to pay back loans if you get a significant amount of non-loan aid that pushes you over your budget. This is usually more of a problem for undergrads than graduate students though because, once again, graduate student budgets are usually more than generous.

[fj20]

Thank you so much for all the detailed information. I have one other question, about the PLUS loan: why is it preferable to take out the kinds of loans offered with your financial aid package, like a Perkins loan for instance, than to take out a PLUS loan? (Is it because PLUS loans are unsubsidized? And if so (I'm embarrassed to ask) why is an unsubsidized loan worse than a subsidized one?)

[rising_star]

I think PLUS loans have a higher interest rate.

Subsidized means that the government pays the interest while you are in school and for the first 6 months following your graduation. Unsubsidized means that either you have to pay the interest while you are in school or it accrues and is added on to the principal (the initial loan amount),

[gsams]

Plus loans have a higher interest rate and you pay interest from the START of the loan. A subsidized loan is interest free while you are in school and has a better rate.

[DeepShadeofBlue]

Thanks for the great information guys!

A friend of the family's is actually a financial aid counselor at university in Illinois. I spoke with him on the phone for a little while, and he seemed to think that it was reasonable to take out Stafford and PLUS loans. As in, I, or any other applicant, wouldn't be completely insane for coming out of a master's programs with anywhere between $50,000-80,000 in debt, AS LONG AS it was a good program fit.

[moahb]

I just attended an admitted students day at USC for the MPA program and this is what they told us about federal loans which I believe is true across the board and not just at USC.

Just for filling out the FAFSA you are eligible for the Federal Stafford Loan Program. Each year you are eligible for:

$8,500 Subsidized loan (no interest accrual while you are at least at half-time student, and for 6 months following graduation)

$12,000 Unsubsidized loan

The interest rate is 6.8%, and there is a 1% fee upon origination.

Assuming you have no defaults on your credit record, you are also eligible for the Federal Graduate PLUS Loan. This loan has a 7.9% fixed interest rate with a 3-4% origination fee. They do not look at your credit score for this, just that you don't have any defaults or problems making payments.

You can borrow up to the cost of attendance (tuition, fees, rent, cost of living expenses, etc) as determined by each school individually based on specific factors of the school. If you receive any merit-aid this is deducted from the amount you can borrow.

Let's say that your cost of attendance for a year is $50,000 and you receive $10,000 in scholarship. You can then borrow the $20,500 (8,500+12,000) in Stafford Loans and $19,500 in PLUS loans.

Again, as I said, this is what we were told by the USC financial aid office and from my research it seems to be true across the board, but certainly check with your schools financial aid office to verify.

Good luck out there!

[pea-jay]

Assuming you have no defaults on your credit record, you are also eligible for the Federal Graduate PLUS Loan.

Does a seven year old bankruptcy count? Been current since.

[RoseThrn82]

moahb The process was explained to me by nyu the same exact way that you described it. So I believe that you are correct in how you broke down the amounts.

pea-jay I read that you can still borrow under the direct plus grad loan with a judgment or bankruptcy older than 5 years. So I think you'd be okay, you might want to ask your financial aid office.

I have a collection acct from 6 years ago (I was a financially dumb when I was 18 seriously don't even ask). I saved the money to pay it off, but I'm afraid if I pay it, that it will stay on my report for 7 more years saying its a bad satisfied debt :-( I'm going to call the direct servicing and ask them if I should pay it before I apply for the plus loan or if I should apply first and wait for a decision from them. Because I'm not sure if debts older than 5 years count period. I don't know. Anyone have experience with that?