jashdown Posted February 26, 2015 Share Posted February 26, 2015 I have been accepted to PA school and am now in the process of saving money for school. I am extremely fortunate to get an interest free loan from a family member. My question is should I still consider filling out fasfa to see the aid I get or is that pretty much pointless? Thanks Link to comment Share on other sites More sharing options...
JohnnyM2 Posted March 2, 2015 Share Posted March 2, 2015 That would seem to be pointless unless you get accepted to a school with needs based scholarships, which is unlikely. Typically, your FASFA application allows you to apply for loans. Any loan you get will have a positive interest rate....except for the one from your family member. I would just take the free loan and skip FASFA. Perhaps someone else knows another reason to complete the FASFA app. It certainly can't hurt to do it. Regarding the family member, make sure you and they have agreed on expectations. For example you won't be required to make payments until a certain period of time after graduation. You should also make sure the term of the loan is defined. It's easy, when dealing with family, to end up with hard feelings due to differing expectations. A formal loan document would be a good idea. Be sure to read the following link: http://finance.yahoo.com/news/4-rules-lending-money-family-154300636.html Pay special attention to point #4. Can you get away with just ignoring the tax issues? In all likelihood, yes but it is tax evasion, which can have severe consequences, and you are entering a profession where ethics is very important. Link to comment Share on other sites More sharing options...
AliB Posted March 2, 2015 Share Posted March 2, 2015 I'm new to the current process as far as grad school (it's been a lot of years since my previous masters!), but as I understand it, FAFSA does have deadlines, many schools have deadlines for filing it, and unless you have 100% assurance you won't need any federal loans for the entire academic year, you won't have that option without a completed FAFSA. It doesn't cost you anything to complete it. And you don't have to accept any of the loans you may be offered. What's the downside to having the option? Link to comment Share on other sites More sharing options...
MT2PA Posted March 16, 2015 Share Posted March 16, 2015 Just make sure you follow all legal requirements when getting loans from family members. It's not as straight forward as them just loaning you the money and you paying it back. Like AliB said, it can't hurt to file FAFSA as a backup just in case. Link to comment Share on other sites More sharing options...
ohsnapPA Posted March 17, 2015 Share Posted March 17, 2015 I'm in a similar situation, but my parents are not paying for my living/housing expenses. I heard that the interest rate accrues from day 1 for the Stafford Loan...so is it better for me to file a FAFSA during the 2nd year for $20,500, instead of filing 2 separate 10,000 loans for each year of living expenses? I'm really new to this loan process, so any advice/insight would be helpful. Thanks! Link to comment Share on other sites More sharing options...
loliz Posted March 17, 2015 Share Posted March 17, 2015 The FAFSA is not a loan, it is just an assessment of what loan amounts might be available to you. Filling out the FAFSA does not cost anything, does not check your credit and does not constitute any agreement about loans. I heard that the interest rate accrues from day 1 for the Stafford Loan...so is it better for me to file a FAFSA during the 2nd year for $20,500, instead of filing 2 separate 10,000 loans for each year of living expenses? I'm not sure what you are asking here... are you saying that you don't need any money until year 2? If that is the case, then, of course, do not borrow it until you need it! Link to comment Share on other sites More sharing options...
ohsnapPA Posted March 17, 2015 Share Posted March 17, 2015 ^ I was thinking that instead of getting 2 separate loans from Stafford for 10,000...I could instead ask my parents for a no interest loan to pay off my living/housing expenses for the first year, and then get a bigger 20,500 loan the 2nd year to cover the costs of my living/housing expenses for both years? Does that make sense? Sorry if that was confusing xD Link to comment Share on other sites More sharing options...
loliz Posted March 17, 2015 Share Posted March 17, 2015 OK, well... that's not really anything that anyone can answer for you. It's between you and your parents. Your loans will not come in a lump sum, they will be divided evenly over semesters. Good luck! Link to comment Share on other sites More sharing options...
MT2PA Posted March 17, 2015 Share Posted March 17, 2015 ^ I was thinking that instead of getting 2 separate loans from Stafford for 10,000...I could instead ask my parents for a no interest loan to pay off my living/housing expenses for the first year, and then get a bigger 20,500 loan the 2nd year to cover the costs of my living/housing expenses for both years? Does that make sense? Sorry if that was confusing xD The biggest problem I see with this is that the Stafford loan can only be used for very specific expenses. I'm not sure they would look favorably on you using that money to pay back the loan from your parents even if it was for housing. Additionally they will only award you up to the cost of attendance minus anything you or your parents pay - so you might not be able to get the full $20k the second year. Instead, I would apply for the loan each year and maybe your parents can help you pay off the interest as you go and then you can pay that back to them later after you are making money. Link to comment Share on other sites More sharing options...
JohnnyM2 Posted May 16, 2015 Share Posted May 16, 2015 Typically, the way student loans work is that they are disbursed to the school one semester at a time. The school deducts the cost of tuition and mandatory fees. For loans that can be used for school related expenses like room and board, travel, personal, etc, the balance is then given to the student. Stafford loans aren't really all that restrictive. You can use them for anything listed in the school's student budget for cost of attendance, which is pretty broad. Link to comment Share on other sites More sharing options...
Recommended Posts
Archived
This topic is now archived and is closed to further replies.