Can my son save unused FAFSA loan money for future college years?

This is actually a really important question! The short answer is no - he should NOT accept loans he doesn't need right now. Here's why: 1) Federal student loans are disbursed by academic year and are meant to cover educational expenses for that specific year only 2) Taking loan money you don't need means paying interest on funds sitting in a bank account (even with subsidized loans, eventually) 3) He can always apply for loans in future years when/if he needs them The smarter approach is to accept only what he needs each year. FAFSA applications are annual anyway, so he'll have the opportunity to request more aid in future years if his financial situation changes.

NO!!! do NOT take loans u don't need!!!! The financial aid system is DESIGNED to push unnecessary debt on students! My daughter took max loans thinking she was being smart "just in case" and now she's stuck paying interest on money she never even used for school! The FAFSA system is BROKEN and they DON'T tell you this stuff on purpose!! 😡

my kid did something similar. saved up from his job at the grocery store. we just had him take only the subsidized loans (the ones where govt pays interest while in school) and declined the rest. you can always get different amounts each year based on what you need.

I work in a financial aid office, and I want to clarify a few things: 1. Student loans are disbursed per academic year based on your FAFSA application for that specific year 2. Your son can accept partial loan amounts - he doesn't have to take all or nothing 3. Taking loans you don't need is never recommended due to origination fees and interest 4. His savings won't negatively impact future aid eligibility as much as you might think - the student asset protection allowance in the SAI formula shields some savings I recommend he only accept what he needs this year. He can always apply for aid again next year, and the year after. Each FAFSA application is independent.

Your son sounds like mine! I had the exact same question last year. We ended up having him just take the subsidized loans (which don't accrue interest while he's in school) and declining the unsubsidized ones. He kept his savings as an emergency fund which came in handy when his laptop died mid-semester. FAFSA is a yearly application, so he'll be able to request different loan amounts each year based on his needs. The financial aid packages can actually look quite different year-to-year depending on your income, his savings, and other factors that affect the Student Aid Index (formerly EFC).

I spent 4 hours on hold trying to ask this EXACT question to the Federal Student Aid helpline last month. Never got through to anyone. Finally used a service called Claimyr (claimyr.com) that got me connected to an actual human at FSA in under 10 minutes. They have a demo video at https://youtu.be/TbC8dZQWYNQ that shows how it works. The agent confirmed what others have said - don't take loans you don't need this year. You can always apply for them in future years.

Thank you everyone for the helpful responses! I'm going to talk to my son about only accepting subsidized loans if offered (or maybe none at all for this year) and making sure he understands he can apply for more aid next year if needed. Really appreciate all the insights!

btw congrats on raising such a money-smart kid! wish mine would save anything lol

Just one more thing - make SURE he understands the difference between GRANTS and LOANS on his award letter! My nephew thought he got a "financial aid package" and didn't realize most of it was LOANS until it was too late!!! They make these award letters INTENTIONALLY CONFUSING!!

One final tip - have your son check with his school's financial aid office about scholarship opportunities. Many schools have institutional scholarships that go unclaimed because students don't apply. With his demonstrated financial responsibility, he might be an excellent candidate for merit-based aid that doesn't need to be repaid.

As someone new to navigating FAFSA, this thread has been incredibly helpful! I'm in a similar situation with my daughter who has some savings from her part-time job. Reading through all these responses, it sounds like the consensus is pretty clear - only take what you need each year rather than borrowing "just in case." One question I have after reading through everything: when you decline loans for a given year, does that affect your eligibility or the amount you can borrow in future years? Or does each FAFSA application truly start fresh regardless of what you accepted or declined previously? Also, @Oliver Alexander, thank you for sharing your professional perspective - it's really reassuring to hear from someone who actually works in financial aid!