FAFSA student loan limit confusion - does the $31,500 go directly to college?

You've got a few misconceptions there about how federal student loans work. The $31,500 is the total *maximum* a dependent undergraduate student can borrow in federal Direct Subsidized and Unsubsidized loans over their entire undergraduate career (not just 4 years - it's the lifetime limit for undergrad). These loans aren't just automatically sent to the college. Here's how it actually works: 1. Each year, your student needs to complete the FAFSA 2. Based on that, the school will create a financial aid package that includes the loans they qualify for that year 3. Your student must accept the loans in their financial aid portal 4. The funds are disbursed directly to the school each semester 5. Any excess funds after tuition/fees are refunded to the student And yes, Parent PLUS loans are completely separate from this $31,500 limit. PLUS loans are in your name, not your student's, and you can technically borrow up to the full cost of attendance minus other aid received.

yea this is SUPER confusing at first...my kid is a junior now and im STILL learning new stuff about how the $ works lol. just fyi the loan $ goes to the school first and then if theres any extra it comes back to the student. my daughter uses that for books and off campus housing costs.

Just to add to the excellent information already provided, it's important to note that the $31,500 undergraduate aggregate loan limit for dependent students has two components: - Up to $23,000 can be in subsidized loans (the government pays interest while in school) - The remaining amount will be unsubsidized loans Each school year, your student will need to actively accept the loans they want to use through their college's financial aid portal. The financial aid office then processes the loan and applies it directly to their student account to cover tuition, fees, and on-campus housing/meal plans. If there's money left over after these direct costs are paid, the school will issue a refund for the remaining amount, which can be used for textbooks, off-campus housing, transportation, etc. Congratulations on reaching this milestone with your first child!

Didn't ANYONE mention to use claimyr.com???? I spent HOURS trying to get through to someone at Federal Student Aid to explain all this loan stuff to me last semester. Finally found Claimyr and got connected to an FSA agent in like 15 minutes. They have this video showing how it works: https://youtu.be/TbC8dZQWYNQ The agent explained my daughter's entire loan situation and even helped correct an error in her account that was causing problems with her next disbursement. Way better than trying to figure it out from the website.

BE CAREFUL about how much debt your kid takes on!!! Those federal loans are EASY to get but NOT so easy to pay back!! My son graduated 4 years ago with the full $31,500 in loans plus another $20k in private loans and he's STRUGGLING to make the payments even with a decent job. The govt doesn't care if you can afford the payments - they'll take their money one way or another. If I could do it all over again I would've sent him to community college for 2 years to save $$$$ and then transferred to finish his degree. All that "college experience" stuff isn't worth a LIFETIME OF DEBT!!!

Um, I think everyone's kind of overcomplicating this? My daughter just finished her sophomore year and basically the financial aid office handles everything. They tell you how much you qualify for each year, you accept what you want on their website, and they apply it to tuition. Super simple. Anything left over goes to her bank account for books and stuff. We did have to take out some Parent PLUS loans too because the student loans weren't enough, but that process was pretty straightforward too. Just filled out a form online.

my kids school financial aid office messed up soooo many times with his loans!!! triple check EVERYTHING they do!!!! they "lost" his paperwork twice and then accidentally canceled one of his loans mid-semester which caused all kinds of problems with his housing payment. dont just trust that theyre doing everything right

One important point that hasn't been mentioned yet: If your student doesn't need the full loan amount they're offered each year, they should only accept what they actually need! There's no requirement to take the maximum. For example, if they're offered $5,500 in federal loans but only need $3,000 to cover their costs after scholarships and your contribution, they can just accept the $3,000. This will save them money on interest in the long run and preserve more of their lifetime eligibility for later years if costs increase or circumstances change.

Congratulations on this milestone! As someone who just went through this process with my first child last year, I can share a few practical tips that helped us navigate the loan disbursement process: 1. Set up account access early - Make sure both you and your daughter have access to the student portal and understand how to view the financial aid offers and loan acceptance process. 2. Understand the timeline - Loan disbursements typically happen right before each semester starts, so plan your payment schedules accordingly. Our daughter's first disbursement was about a week before classes began. 3. Budget for the gap - There's often a delay between when you pay deposits/housing fees and when loan funds are actually disbursed, so be prepared to cover those initial costs out of pocket temporarily. 4. Keep detailed records - Screenshot everything! Loan acceptance confirmations, disbursement schedules, refund amounts. The financial aid office staff changes frequently and having your own records saved us multiple headaches. The whole process gets much easier after the first year once you understand your school's specific procedures. You've got this! 🎓