Private student loans vs. Federal FAFSA loans - where to find reliable info?
I'm totally confused about private student loans vs what my son can get through FAFSA. His college acceptance packet mentioned private loan options but the FAFSA website barely mentions them?? We just got his SAI score back and it's WAY higher than we expected (like $22,000 contribution when we make under $85k). The financial aid package covers maybe half of what he needs. The acceptance letter had links to Sallie Mae and some other private lenders but I'm worried about crazy interest rates compared to federal loans. Do private loans have the same income-based repayment options? Why isn't there clearer info about these options on the studentaid.gov site? I feel like we're missing something obvious here. This is our first kid going to college and I'm completely overwhelmed by all these different loan types!
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Aidan Hudson
Private loans and federal loans are completely different things. FAFSA only deals with federal aid (grants, work-study, and federal loans). Private loans come from banks or lenders and aren't part of the federal system at all - that's why they're not on studentaid.gov. Big differences: - Federal loans have fixed interest rates set by Congress (currently 5.5% for undergrads) - Federal loans offer income-driven repayment plans - Federal loans have forgiveness options - Federal loans don't require credit checks for most undergrad loans Private loans: - Interest rates vary widely based on credit score (can be 4%-13%+) - Usually no income-based repayment options - Few forgiveness options - Almost always require a cosigner with good credit Always max out federal loans before even considering private ones. Did your son get offered Direct Subsidized or Unsubsidized loans in his aid package? Those are federal. Also, have you appealed your SAI? $22k seems high for your income level.
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Lucy Lam
•Thank you for that clear breakdown! He got offered $5,500 in Direct Subsidized/Unsubsidized loans in his package. But tuition+housing is $37,000 and with our expected contribution of $22k plus the federal loans and a small work study, we're still short about $8k per year. I didn't know we could appeal the SAI! How do we do that? Would that potentially increase his federal loan amounts?
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Zoe Wang
been thru this with 2 kids already! colleges LOVE to push private loans bc they get their $$ faster. DONT DO IT unless absolutely last resort!!!! max out all subsidized loans first (no interest while in school), then unsubsidized, THEN parent plus if you can. private loans are BRUTAL with interest and no protections.
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Lucy Lam
•Thank you for the warning! So many red flags I didn't know about. I'll definitely look into Parent PLUS loans before any private options.
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Connor Richards
You can absolutely appeal your SAI (Student Aid Index) if you have special circumstances. It's called a Professional Judgment review. Common reasons include: • Job loss or reduction in income since your tax return • Medical expenses not covered by insurance • Supporting multiple college students • Divorce or separation since filing taxes • One-time income that inflated your taxes (inheritance, retirement distribution) The process varies by school, but generally: 1. Contact your school's financial aid office immediately 2. Ask about their "Professional Judgment" or "Special Circumstances" appeal process 3. Gather documentation (medical bills, layoff notice, proof of reduced hours, etc.) 4. Submit everything before their deadline Also, $22,000 SAI on $85k income does seem unusually high. Double-check your FAFSA for errors - sometimes even small mistakes in reporting assets or income can dramatically affect your SAI calculation.
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Lucy Lam
•This is incredibly helpful! We actually did have some significant medical expenses last year (around $14k out of pocket) that weren't covered by insurance. And my husband temporarily switched to a higher-paying contract position that ended, so our income this year will be about $12k less than what was on our tax return. I'll definitely contact the financial aid office tomorrow about a Professional Judgment review. Thank you!
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Grace Durand
My daughter had same issue. Called FAFSA for weeks couldn't get through to ask about appeal process. Literally would wait 2+ hours and get disconnected. Stressful!!
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Steven Adams
•I had the same exact problem trying to reach someone about my son's verification issue! What worked for me was using Claimyr (claimyr.com) - it's a service that holds your place in the phone queue and calls you when an agent is available. Saved me hours of waiting. They have a video showing how it works: https://youtu.be/TbC8dZQWYNQ It was actually worth it because I finally got someone to explain why our SAI was calculated incorrectly and how to fix it. The agent stayed on the phone with me for almost 45 minutes working through everything.
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Alice Fleming
Speaking from painful experience... PLEASE look into Parent PLUS loans before touching private loans! With Parent PLUS: - Fixed interest rate (currently 7.05%) - Can qualify for income-contingent repayment if consolidated - Eligible for Public Service Loan Forgiveness if you work in qualifying job - Death/disability discharge protections My oldest graduated with $35k in private loans at 11% interest because we didn't understand our options. He's paying almost $500/month and the balance has barely moved in 3 years. Meanwhile, my youngest has federal loans with much more flexible terms. Also, another option to consider - many schools offer payment plans where you can spread the cost over 10-12 months instead of paying each semester. This might help reduce how much you need to borrow.
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Lucy Lam
•I had no idea about Parent PLUS loans qualifying for income-based repayment if consolidated! That's a huge benefit over private loans. And that payment plan option sounds worth looking into as well. Thank you for sharing your experience - it's really helping me avoid making the same mistakes.
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Hassan Khoury
Did anyone check if the CSS Profile is required by the school? Some private colleges require BOTH the FAFSA and CSS Profile to award institutional aid. If you only filled out FAFSA, you might be missing out on school-specific grants and scholarships that could reduce what you need to borrow!!!
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Lucy Lam
•Oh no... I think we might have missed this. I vaguely remember seeing CSS Profile mentioned somewhere but thought it was just another name for FAFSA. We definitely didn't fill out a separate form. I'm going to check the school's financial aid website right now. Thank you for pointing this out!
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Aidan Hudson
One more thing to consider: your student can accept LESS than the full loan amount offered in the aid package. Many students make the mistake of taking all loans offered even if they don't need the full amount. Calculate exactly what you need after: 1. Any scholarships/grants 2. Your manageable contribution 3. Student work-study/job income 4. Payment plans Then only accept the minimum federal loans needed to cover the gap. You can always request the additional offered amount later in the semester if needed. This approach can save thousands in unnecessary interest later!
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Lucy Lam
•That's excellent advice! We definitely need to sit down and calculate exactly what we need rather than just accepting everything offered. And I didn't realize we could request additional amounts later if needed - that's good to know as a safety net. Thank you to everyone who replied! I feel so much better informed now. We're going to: 1. Appeal our SAI based on medical expenses and income change 2. Check if we need to complete the CSS Profile 3. Look into Parent PLUS loans for any remaining gap 4. See if the school offers a payment plan This forum has been incredibly helpful!
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