Private College Student Loan

FAFSA - 2 Questions for Financial Aid Officers?

I completed my FAFSA at the F.A office at my school. The FA person asked for my "pin" to sign the application electronically. I qualified for roughly $20k in federal loans. I have now found that there is roughly $9,000 that will not be covered under Federal Student Loans (subsidized & unsubsidized) and was told I would need to get a private loan to fill the gap sorta speak. Due to the Banking woes etc - the 3 places I contacted said you have to have a debt to income ratio of under 10% or under 15%. Mine is 26% with a FICOH of low 700's. So I was denied Sallie Mae, Wells Fargo Education loan & my personal bank due to debt to income ratio. Fine, I dont have a problem with that. My main concern at this point - is since my FAFSA was signed (by the FA person at school using my PIN) will that $20k automatically be released to the school? I signed the application to the school, and when going to the FAFSA site, I cannot delete the school. What should I do to make sure $20k does not get dispursed to the school since I cannot attend due to I cant get loan for the gap between cost of tution & federal loans. Im just worried that since I signed the app to school & FAFSA it will automatically be dispursed, and I'll end up owing 20k for a program I never attended. My 2nd question - just for future knowledge - On my FAFSA report it says my Estimated Family Contribution (EFC) is 39698. What does this mean in layman's terms? Is that a code for the % my contribution would be no matter what school I attend? Or can I find a similar program at a cheaper school and get everything covered under Federal Aid. Just curious. Thanks! I already know what EFC means - Im curious how the 36968 breaks down to % and how do you figure it. So what you are saying - is even if you do NOT attend a school - you still owe 20,000 dollars for it - never attending? You said checks would be dispursed regardless if you attend or not.

Public Comments

1. EFC means expected family contribution so that is what your family is to pay tword your education, yes you can look for the same program at another school and it may be cheaper look at the price per credit.The checks will be disbursed to your school and unfortunately there is nothing that can be done about that.
2. FAFSA does not disburse loans. There are different lenders that disburse federal loans. You will need to sign a promissory note among other things in order for the money to go to the school. Just by completing a FAFSA and having that info sent to a school does not mean you get the money. There are steps you need to follow. So if you are not attending this school and have not picked a lender or signed a promissory note, the money will not be disbursed and therefore, you do not owe anything. The first answerer is completely wrong. As for EFC, yes, it will be the same regardless of which school you attend. However, some schools have more private scholarships that they give out to students who need more money so the amount you take out in loans may not be the same from school to school.
3. The EFC doesn't break down into any sort of "percentage". It is just a code the school uses to determine what kinds and how much aid you'll get. Your EFC will be the same at every school, but your award package may not. Also be aware this is not how much money you will have to pay the school. Some schools are very inexpensive.. some cost quite a bit. If your school isn't giving you enough aid to cover all your costs, you should apply at several other schools and "shop around" for a better financial aid package. It is perfectly acceptable and legal to get "Award Letters" from more than one school and compare the bottom line.... i.e. find the school you can attend with the least amount of loans. You should list schools of varying degrees of cost. If you choose a cheaper school, you may find that your federal loans WILL cover everything and even give you some left over to live off of. PS: never give your PIN to anyone. If you didn't enroll in classes at that old school, you won't have any problem.. if you did, you need to drop them NOW so you aren't charged.