PRIVATE STUDENT LOANS
If you have had practice dealing with financial aid as an undergraduate, then you can at least appreciate the simplicity of filing the FAFSA as a graduate student. Here is what to expect.
As a graduate student, you are considered independent. This means the parent tax and asset information is no longer required to complete the FAFSA. You will have to submit any tax and asset information you have personally, but no more parent tax returns!
Verification is when the financial aid office reviews tax documents to confirm that the information is the same as what was put on the FAFSA. If selected for verification, the student must submit their own tax returns. However, not all graduate students are employed, so they may have zero income and no tax return filed. If living with parents and not employed, the student will be required to document in-kind support from family. This can be as simple as demonstrating a monthly expense budget covering housing, food and other expenses and a statement identifying a dollar amount of support given to the student from the family. This is a simple request, but must be processed to maintain eligibility for federal funding.
If selected for verification and receiving in-kind support from the family, the financial aid office will expect you to document it. You only need to document basic living expenses as a graduate student to fulfill the verification request. This boils down to being able to demonstrate that you receive at least $8,000 a year in support from someone else (usually parents). Putting down that you receive zero support will not clear the verification requirement. If you list a number much higher than $8,000 per year then eligibility for the subsidized Stafford loan could be jeopardized.
recent budget signed into law by Obama in early August 2011 removed the subsidy for graduate level Stafford loans. Before this was passed, graduate students could apply for a subsidized Stafford loan of up to $8,500 per year if qualified on the FAFSA. A subsidized Stafford loan is where the government pays the interest on the loan while the student is in school. This was a way for graduate students to save a bit of money on interest costs, but now the option is being eliminated. The 2011-2012 academic year will be the last time any grad students can access this loan. Beginning July 1, 2012, all Stafford loans for graduate students will be considered unsubsidized and interest will accrue normally.
The FAFSA provides need based grants to undergraduate students pursuing their first bachelor’s degree. However, there are no need based grants for graduate level students. This is a big disappointment for former undergraduates that got a lot of financial aid in the past. Graduate students qualify for up to $20,500 in federal Stafford loans. Of that amount, up to $8,500 can be subsidized and $12,000 can be unsubsidized. The Subsidized loan amount is determined by financial need, so some students will only qualify for $20,500 in Unsubsidized Stafford loans.
As an undergraduate, filing the FAFSA on time meant everything for eligibility. This means filing the FAFSA as early as Feb 15 each year. However, for graduate students, the FAFSA can be filed sometime in the summer when you can get it done. No need based money will be lost if filed a little later.
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