Cost of Attendance: Can Your School Cut Off Your Student Loans?

by Judge Josh on August 24, 2010

Marissa’s a smart gal. She’s done her student loans homework and she knows how much she’s allowed to borrow from the federal government each year. She’s got kids to feed and bills to pay, and she’s counting on using those loans to do so.

Problem is, well before she reached that point, her school has cut off her student loans. And yes, they can do that.

Howdy Judge Josh!

(…removes hat…) Evenin’, ma’am.

I am currently a non-traditional student enrolled in my senior year as a special education major! I am married with two children and like everyone else, times are hard for us right now but I am determined to graduate.cost-of-attendance

Attaway!

My question is in regards to the financial aid package that I was offered. When I completed my FAFSA my EFC is zero (o), told you we were poor! They anticipate my cost of attendance for this year at $21,240.

If there’s ever a good time to be poor in life, it’s when you’re going to college, is it not? :)

I was extremely lucky and have received Pell grants, teaching grants, and an excellent scholarship. After these were deducted it left me needing $3200 of which I got $2750 in subsidized loans and $450 in unsubsidized loans.

Wow, congrats. That’s a pretty nice package there…but I sense trouble on the horizon.

They are telling me that I cannot get anymore money for the semester because I have met my cost of attendance and they cannot give me anymore than what it costs to attend. This is the second semester that I have taken out loans so I know that I have not maxed out my loans.

I noticed that as a senior I can take out $12,500 in student loans. We desperately need the extra money this semester but I am being told that I cannot get any more. Is this correct?

Yes. Here’s the thing: Yes, it’s true that there’s a limit of $12,500 for independent juniors and seniors like yourself; however, that limit presupposes that the loans you DO take will be put toward the cost of attending your school.


That’s where that “cost of attendance” figure comes in. That’s basically your school doing some math and then saying, “Look: It costs $21,240 to attend here, all included. We’ll get you funding up to that point, but any costs you have beyond that are your own problem, because we know it costs $21,240 to go here and no more, so we’re not giving you loans for extra crap beyond that.”

More or less, that’s what they’re saying. This is to stop people from gaming the system and taking out an extra $5,000 to pay off their credit card bills, delinquent bar tabs, etc. So while that $12,500 limit is there, it’s not an open credit line that’s guaranteed  for you to be able to use however you like.

Can I take out the full $12,500 in loans that I am able too even though this would put me over the estimated cost of attendance?

Possibly, but you’re going to need to plead with your financial aid office for special consideration — which I think you have a good shot at. More on that in a second.

Some other things that I am not sure matter or can be used but I will throw them out there for you.

First, they are anticipating my room and board to be $8800 but my own personal room and board amounts exceed this amount. I brought this to their attention and was told that since I had a husband that all those costs were cut in half making my half less than the $8800. Doesn’t sound to fair to me.

Actually, I’d disagree with you on this one — I think that’s pretty fair. If a student is married and living under the same roof with an able-bodied spouse, then it’s reasonable for them to assume that spouse is providing some level of financial help and that you therefore don’t bear the same financial burden that you would if you DIDN’T have a spouse living with you. I know all situations differ, of course, but overall I think that’s a pretty fair assumption that saves taxpayers many billions.

Second, I have day care expenses totaling close to $500 each month.

Now, this one you can take to the financial aid office when you’re pleading your case for special financial hardship. Get receipts for your expenses. Get a letter from the day care provider that says yes, Marissa’s kid(s) come here every week and incur this $500 cost every month.

Third, I had to have emergency surgery last week and we will be getting a bill for the full amount since we do not have health insurance. I will also need a follow up surgery in a few weeks.

Same here — medical emergencies ought to get you the largest amount of special consideration. Again, bring in as much documentation as you can showing the dates and costs of the surgery. And if you’ve got anything showing that you must have the follow-up surgery, bring that, too.

Fourth, we have $200+ going out each month in prescriptions.

I don’t know if that one will help sway the financial aid office or not, but bring it in. You never know.

I know this is a lot but I need help, I cannot quit now I’m too close!! Thanks for your help and I look forward to hearing from you soon.

Sure. Here’s the takeaway — the financial aid office is a key player here. It’s time to start kissing ass with them, getting on a first-name basis with people, being extremely polite and grateful when you’re dealing with them, etc.

Remember, these are all normal human beings who work there, and they’re much more likely to help someone they like and sympathize with than someone who’s a dreadful pain in the ass. (Granted, they’re humans who have heard a LOT of financial  sob stories and are often preternaturally hardened to such things — that’s why you bring the documentation).

If the financial aid office still gives you the cold shoulder and you still want to borrow money to meet those expenses, then you still have the option of using private student loans. We’ll deal with that topic tomorrow.

Good luck, Marissa, and let us know how it goes!

— Comments/questions for Marissa or me? Let us know in the comments below.

{ 7 comments… read them below or add one }

AMY August 24, 2010 at 2:45 pm

Out of curiosity, for your college, do they provide you with some type of health Insurance? I know the college I go to it is mandatory to have health insurance so my tuition costs includes payments for insurance, therefore I have at least some basic coverage here. If your school does this, maybe you can negotiate some type of payment plan with the insurance company, or the company itself might be able to cover some of the costs of your medical bills.

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Diane August 24, 2010 at 5:09 pm

I ran into a similar issue regarding my high childcare costs. $500 isn’t too bad, but they might still include that in your costs. I’m going to be paying $2250/month in childcare while waiting for subsidized spots to open up (3 kids under 5) and my student loan didn’t come close to covering childcare, tuition, and books, let alone any housing or living expenses. We (husband and myself) chose to try and makes ends meet without the extra student loans (to try and cut down on the debt), but were told that if we wanted to fight it, we could probably get the amount for the loan increased.

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Jill August 24, 2010 at 7:58 pm

How about this one. I wanted to take a few classes at a community college just for my own preparation for Grad School. I know I’ve already maxed out Federal Financial aid (which according to their calculation, Ive never really been “poor enough” to receive much of anything..). I was banking on private student loans. Much to my surprise, the school (as well as quite a few others) no longer accept private student loans. They only accept Fed loans, or pay out of your pocket…So much for that. Im doing my research, but there also seems to be many hoops to jump through to get any kind of private loans for Grad School (thats if they even certify them). Where does this leave people who actually work many hours, live on their own and don’t have children? Where is my funding?

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Angie August 25, 2010 at 6:58 am

I had the same problem my first semester. I purposely took out extra so I could get a laptop due to my disability (sleeping disorder) I can’t stay awake in the computer labs, so it’s nice to have something I can do in my room at all hours. Though I qualified and go the money, they were going to force me to leave the money in my account for the next semesters bill. I had to talk to the head of the department, giving him the reasoning I needed it. Instead of giving me the $2000 for the computer, they gave me the full $4k…so watch out. I ended up being a stupid freshman…had to take out an extra loan the next semester. So pay attention to how much they do end up giving you if you do get it to go through. You might mess up your next semesters budget.

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Samantha August 25, 2010 at 9:05 am

I know that it’s not something anyone usually wants to do, but I would recommend she look into her city or county’s social/human services and start taking advantage of them. I’m a single mother and have medicaid for my daughter and myself, which gives me piece of mind since I don’t have to worry about what to do when someone gets hurt or sick. Also, if your state offers child care assistance, they may pay a portion (or all) of the childcare costs. Some people think that using foodstamps is kind of embarrassing, but you can get quite a bit of money for a family of four (depending on income). And while things like TANF aren’t for long term, if you haven’t received them thus far, they may provide you a bit of extra money. Plus, if ever there was a time to take advantage of whatever money the gov’t offers out in human services, it’s during college. And your case worker will probably be happy that you’re going to school and working on being a productive member of society! Your financial aid office should have a form that you can fill out regarding your daycare costs that you can submit to them which will then allow you to receive additional loan $$$.

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Anonymous August 25, 2010 at 9:23 am

I agree….most colleges MAKE you either have health insurance, or a student health plan is a part of the “extra fees”. So, look into that to see if they cover something, ANYTHING for you.

Living off the student loans? Ummmm…well….I dunno that I would do that, and I can see why they WOULDN’T let you do that. Cost of attendance also covers living expense, which figures in your rent. Not hubby’s rent…your rent. Because YOU are the student.

*DO* go get friendly with the financial aid folks. Because they know the ins and outs of the system. And if you are “just a student” that asks question A, they will give you the answer to question A. If they know (and like) you, if you ask question A, they will not only answer question A, but also A.2, A.3 and give you clues about questions B, C, and D that you didn’t even KNOW existed.

Pay attention to what they say. They will give you clues. Especially if they say they can’t do something. What is the reason? “Well, we would need to document blah blah blah…” LOOK…a clue!! How can you document what they want?

And keep trucking. Being a senior, so close to graduating, you need to walk through the fire to come out the other side. You’re almost there!

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Deb August 26, 2010 at 2:42 pm

As I read all the other comments, I am reminded of something when I started my studies 2 years ago. Time and again the comment comes up to get to know your financial aid advisor.

When I started, I had not too long been married to a man who was entitled to disability benefits. I have never had dealings with disability. I was trying to be open and honest in declaring my household income because I know the backlash of overlapping government funding.

Months into my program, my advisor re-read some information I had input and was re-assessing my questions to her. It turned out that they had actually assessed for income to my husband as income to me personally; because I had misinterpreted the questions. You know, from that time for the balance of that year, I had her do all calculations with me over the phone. Best thing I ever did. They found my entitlement to student funding was actually higher than what they had given me and corrected the error.

That only happened because we had a continuing dialogue about various aspects of my program and challenges I experienced from day to day. I was so frustrated trying to understand why I never had enough $$ and was trying hard not to resort to venting AT her; but my situation was extremely stressful. I just calm and kept talking to her and finally she heard something that explained why my funding seemed to be falling short. She actually sat down with her boss to figure out the problem.

One of the issues that came up initially in trying to understand the questions was the fact that I own a house. It is fully mortgaged; but I was told that it did not count against me in the calculations as an asset because I still had to live somewhere. I had to write an explanation back to my advisor so that she could clear up the misunderstanding created by my original answers.

Once, when I was short-funded, the advisor thought I had used up my allowable funding and was being cutoff. You really owe it to yourselves to keep the dialogue open until you have covered each point to ensure that you have the funding to finish what you start!

Since then, so much in my life has changed again. I am now entering a new institution and my first question was to ask how to personally meet my financial aid officer. They actually hold 1 orientation day for mature students who are trying to understand what they are up against and 1 orientation day for questions specifically aimed at the course programming, etc. By the way, those orientation sessions were structured to include previous students who had graduated and maybe moved on. Each of the former students stressed how important it was to attend the open houses and orientation sessions to find out things that might be covered that would help offset some of the biggest challenges.

My marital circumstances have changed and my youngest children have stopped attending school as dependents to me.

I am beginning to feel like I am starting all over, because the information I used before had so drastically changed. I really have to read everything thoroughly-knowing how easy it is to fall through the cracks; to get lost in the paperwork.

Here is something to make certain you check… your assets–like old cars you no longer own! The process of application can refuse you if you have cars listed under your name at the motor vehicles office, if their combined value is higher than $5,000 (for Canadian students). I had to go to the motor vehicles office and show that old vehicles had been scrapped or sold off. They won’t necessarily explain the problem unless you dig for more information (CLUES). Once, the problem was a my licence plate had 1 digit out of order and so the same car was listed twice–which took me over the allowable limit.

Another thing that used to come up was that because I had absolutely no $$ to contribute, they made me explain how I planned to cover any shortfalls. They would not have agreed to fund me if they thought I would drop out. I had to explain how I used our food banks and thrift shops. Some of our local landfill sites will allow you to take things out and I use a lot of recycled stuff in my project. I also made arrangements to take away things from our maintenance staff, to reduce what they had to throw at the landfill sites. Some of the equipment I use was donated to the school. I watch the bulletin boards and stay in touch with the technical assistants who manage these things. They sell those things off so cheaply but the $$ get put back into the bursary funding for students, anyway. I bought some camera film developing equipment and my ceramic kiln for peanuts. I explain how I use my bursary $$ to cover things like my computer upgrades, software, field trips, etc. If they don’t realize how resourceful you are attempting to be, they may pass you over.

However, you have to pay attention to every detail you include to be certain that it is not one of those points that could negatively influence your calculated funding. I had other things come up when my marital status was changing that almost got me eliminated from the process. I had to keep asking for verification in writing to make sure that I had met their requirements. From one government agency to another, there was not always the cooperation I needed to get things done in a timely fashion. Even where I lived made in a difference in a travel allowance that was issued.

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