Do you have to do FAFSA to get loans?

[shortbun]

If a parent is not intending to pay for the student's college education, why is he required to fill out the FAFSA? There is no OBLIGATION for a parent to contribute anything financial to his child's tuition bill (unless there is some child support agreement that states otherwise).

SO theoretically:
Say that DH and I decide that we are not going to pay for DDs college tuition for whatever reason (we don't agree that she is mature enough to have it be worthwhile, we have other things we want to spend our money on, we don't like her major/college choice, whatever one of the million valid reasons we might have). Why are we required to fill out the FAFSA which will tell us what our 'parent contribution' is going to be? Obviously, FAFSA might determine that we 'should' pay $10K, but if we don't, then they (the college, and or DD) has to figure out another way for the bills to be paid. So why tell us how much we should pay?

I've got no stake in this, it's just theoretical, but I'm curious....

Because your child needs the forms to get the loans that SHE will be repaying. Also, the 'parent contribution' portion of tuition would be hers as well. She could emancipate herself from you but would then need to provide her own health insurance as well.

 

[LovetheMouse12302]

My husband always did fill out the FAFSA and took out private student loans. He has both federal and private student loans. The private student loans are a pain in the butt, I wish they were all federal.

 

[a1tinkfans]

Wow. Sorry you felt this was unhelpful. They asked a question and I provided an answer along with the reason why. Hopefully they were not as offended as you apparently were. I find your response hurtful and rude.

magicmommy: Way to Go! Good for you and your kids! I am not looking forward to "using" my hard earned $$$ and will be filling out every single possible aid form even tho we prob will not get help. ..we shall see.
Personally, I applaud you and saw nothing wrong with your response.

 

[scrapquitler]

Because your child needs the forms to get the loans that SHE will be repaying. Also, the 'parent contribution' portion of tuition would be hers as well. She could emancipate herself from you but would then need to provide her own health insurance as well.

I still don't understand why the finances of a parent who is not paying matter to a student who is applying for his/her own loans. And why her contribution would be based on Mom and Dad's assets if Mom and Dad were not willing to contribute.

 

[allison443]

I still don't understand why the finances of a parent who is not paying matter to a student who is applying for his/her own loans. And why her contribution would be based on Mom and Dad's assets if Mom and Dad were not willing to contribute.

The financial aid system is set up with the idea that the first responsibility for a student's college education rests with the student and their family. After their ability to pay is considered, then aid can be given by the federal government, the institution itself, etc.

People can disagree with that, but that's the general premise of the system. For example, someone whose parents make 200K a year doesn't get a grant from the government. Do you think they should be able to, just by saying their parents don't want to contribute? Why would any parents contribute then, if they could get someone else to pay for it just by saying they were unwilling (not unable) to pay

 

[msmayor]

I still don't understand why the finances of a parent who is not paying matter to a student who is applying for his/her own loans. And why her contribution would be based on Mom and Dad's assets if Mom and Dad were not willing to contribute.

Because if a student's financial aid could increase based on a parent's WILLINGNESS to contribute, then every set of parents would say "I won't pay" in order to increase their child's chance at aid.

Suppose your child was awarded a generous merit scholarship, and the school required a FAFSA on file in order to claim the scholarship. (my daughter's school does) Would you still feel this way?

Eligibility for federal grant money and federally subsidized loans in the STUDENT'S name require the FAFSA. If you choose not to complete it, you potentially cut off a source of funding for your child.

 

[juliebean]

Think of it this way.... how would it work if you only filled out tax forms and paid taxes if you were WILLING. There is limited aid as it is, this is how the federal government determined who is most needy. Is it fair? No, but then what in life is?

If it's any consolation this is a question that I answered everyday when I worked in financial aid. It is widely not known that parental involvement is required by the Feds via the FAFSA. Oh, I wanted to add - the limit for the student Stafford loan is very low - $4,000 for jr and sr year, less for fr and soph, so although those are in a student's name, with the cost of college these days mean that parent's should anticipate taking out savings, or loans to help.

There's a whole political thing behind it - but banks do not want those limits raised, because it would mean less they get to loan out and it is a very lucrative market. Way too many of these private loans are close to loan shark rates, so I want to make sure the OP has the knowledge to protect themselves. Almost anything is better that a private loan, they can be very nasty - both the debt and the lenders assigned to collect them.

 

[TangaroaTiki]

Great info here I'll need to be looking for college loans soon.

 

[tasha99]

I don't know why someone wouldn't fill out the FAFSA. Even if a kid wants to apply for a scholarship, the FAFSA is often required (even for private scholarships).

I also would NOT get a private loan over a Stafford Loan. There are all sorts of repayment options and loan forgiveness programs for certain field available for Stafford and Perkins Loans that are not available for private loans.

 

[friskykitten]

I agree that filling out FASFA is very important. My daughter has received some financial aid from the university she is attending through FASFA that she would not have received otherwise. We also had to fill this out in order for her to recieve the paltry amount she is getting from a PELL grant. (Amazing what they consider a parent's expected contribution to be but I digress...)

On another note, I have four more children who will attend college in the future. One thing I can advise is have your children apply for any and all scholarships they possible can. My daughter did not take me seriously enough when I rode her hard about applying for scholarships and now she wishes that she had headed my warnings more as she is having to take out loans in addition to her aid.

 

[mrsklamc]

Scrapquilter: Filling out the FAFSA does not commit you to anything financially, but if you refuse to do so, your child will not be eligible for a Pell Grant (free money to those eligible) or any federal loans. You as the parent are not responsible for paying for anything, just providing your tax information, even if you are not paying for anything.

Also...had a cousin whose school required ALL students to fill it out, even if they had intended to pay out of pocket.

 

[prncess674]

I agree that filling out FASFA is very important. My daughter has received some financial aid from the university she is attending through FASFA that she would not have received otherwise. We also had to fill this out in order for her to recieve the paltry amount she is getting from a PELL grant. (Amazing what they consider a parent's expected contribution to be but I digress...)

If your DD qualified for any Pell Grant money she is doing better than most kids I knew. Pell Grants are free and clear money you don't have to repay. I would have been doing flip flops for ANY grant money! Going to college for free is not a right in this country. I graduated in one of the first classes that had access at any income to unsub Stafford loans. My parents didn't have the means to pay for my school and I am thankful that the US Government was willing to give me (an unemployed 17 yr old with only a hope and a dream) an unsecured loan to better myself. I had to repay every single dime and only had less than $500 per semester in Stafford subsidized loans. Just because you were peeved over the lack of FREE money remember that many many more received ZERO free money.

 

[allison443]

I agree that filling out FASFA is very important. My daughter has received some financial aid from the university she is attending through FASFA that she would not have received otherwise. We also had to fill this out in order for her to recieve the paltry amount she is getting from a PELL grant. (Amazing what they consider a parent's expected contribution to be but I digress...)

On another note, I have four more children who will attend college in the future. One thing I can advise is have your children apply for any and all scholarships they possible can. My daughter did not take me seriously enough when I rode her hard about applying for scholarships and now she wishes that she had headed my warnings more as she is having to take out loans in addition to her aid.

Sorry you think the Pell grant is "paltry", but it is free money provided to your child. Most people I know would be very happy to receive some free money for their college bills!

 

[scrapquitler]

Scrapquilter: Filling out the FAFSA does not commit you to anything financially, but if you refuse to do so, your child will not be eligible for a Pell Grant (free money to those eligible) or any federal loans. You as the parent are not responsible for paying for anything, just providing your tax information, even if you are not paying for anything.

Also...had a cousin whose school required ALL students to fill it out, even if they had intended to pay out of pocket.

Thanks to everyone who answered my questions about this

It was totally theoretical. Thanks!

 

[SandrA9810]

Actually the only "upside" to a private loan over a student loan, is a private loan can be balled up with a bankruptcy. A student loan will forever be with that person until they pay it off, or they finally garnish the student's wages later in life.
Just theoretically speaking.

In theory, a parent or student would have to have good credit/good job in order to be approved for the loan. So they're probably not thinking about claiming bankruptcy 5 years down the road. Or they could be thinking of wanting a $100,000 education and then filing for bankruptcy to get it for free without it looming over their head for the rest of their life.

 

[allison443]

Actually the only "upside" to a private loan over a student loan, is a private loan can be balled up with a bankruptcy. A student loan will forever be with that person until they pay it off, or they finally garnish the student's wages later in life.
Just theoretically speaking.

In theory, a parent or student would have to have good credit/good job in order to be approved for the loan. So they're probably not thinking about claiming bankruptcy 5 years down the road. Or they could be thinking of wanting a $100,000 education and then filing for bankruptcy to get it for free without it looming over their head for the rest of their life.

Interesting observation and persepective.

However, you should be aware that it is very, very difficult to discharge ANY kind of student loans (private or governmental) through bankruptcy. I'm not sure what you mean by "balled up with a bankruptcy".

 

[Wendy&Grumpy]

Think about it this way - when an organization decides to give a scholarship, they decide what the application process and qualifications are - if you qualify, you can apply and possibly get a scholarship.

Pell grants are the governement's "scholarship" therefore the feds decide what the application process and qualifications are. They've just made the whole process easier by using this same tool (the FAFSA) to determine eligibility for Stafford loans (another of their programs) as well.

It's to every student's benefit to complete a FAFSA and learn their options.

Also, if you are a student whose parents refuse to provide their income & other information for the FAFSA, talk to your school's FA folks. You're not completely shut out!

 

[Irin997]

I still don't understand why the finances of a parent who is not paying matter to a student who is applying for his/her own loans. And why her contribution would be based on Mom and Dad's assets if Mom and Dad were not willing to contribute.

Because it's required to receive any kind of federal grants or loans.

From the FAFSA website:

11. Why do I have to provide my parents' information on the FAFSASM?

When you apply for federal student aid, your answers to the questions in Step 3 of the paper FAFSA or the Dependency Status section of the online FAFSA will determine whether you're considered dependent on your parents or independent. If you're considered dependent, your parents' income and assets as well as your own must be reported on the FAFSA. Students are classified as dependent or independent because federal student aid programs are based on the principle that students (and their parents or spouse, if applicable) are considered the primary source of support for postsecondary education.

 

[tasha99]

Because it's required to receive any kind of federal grants or loans.

From the FAFSA website:

It's also used for regular scholarships, not just loans and federal grants. For example, my last two years as an undergrad I had a scholarship that met 90% of my unmet need--so the foundation that was funding me wanted to see what the school determined to be my official budget (tuition, rent, living expenses, etc). They were able to subtract what other grants I had, such as the Pell, and base what they gave me off of the expenses that were left over. This was a merit and need based scholarship, but they wouldn't know how much to give me without the FAFSA and budget from my school. Maybe a scholarship that is based soley on merit (ie gives a set dollar amount rather than a percentage) wouldn't do that, but maybe they would to prevent gross overpayment of grant money. Basically, if you don't fill out the FAFSA, don't expect to be eligible for many private scholarships.

 

[leahjade]

I don't know why someone wouldn't fill out the FAFSA

Why? Because I filled it out for two years but didn't receive anything. Plus my neighbor said she got private loans which had a much better interest rate than the government loans!