After the FAFSA, which number should decide how much you borrow?

Summary

The number that matters comes from the school, in its financial aid offer, not from your FAFSA Submission Summary. The summary shows estimates, and each school makes the final call on what it offers. Subtract the grants and scholarships in the offer from the cost of attendance, then subtract what your family can pay, and what is left is the most you should expect to borrow.

What the FAFSA Submission Summary can and cannot tell you

The summary appears on your StudentAid.gov dashboard once the form is processed, usually right away and sometimes after one to three days. Only the student can open it. A parent or spouse who filled in part of the form cannot.

Its Eligibility Overview tab estimates your federal aid and gives your Student Aid Index (SAI). The SAI is an index number, not the amount your family will have to pay. Schools subtract it from the cost of attendance to measure financial need, and a negative SAI signals higher need. None of the dollar amounts on that tab are guaranteed. You get the real ones after you are admitted, from each school's financial aid office.

Reading the offer line by line

Aid offers have no standard format. Loans often appear as "L" or "LN," with "Sub" and "Unsub" for subsidized and unsubsidized. Sort every line into one of three piles:

Money you keep. Grants and scholarships generally do not have to be repaid.
Money you earn. Federal Work-Study is a part-time job you have to find and apply for, paid at least once a month. It is not taken off your bill up front, and it is not guaranteed.
Money you borrow. Direct Subsidized and Unsubsidized Loans are the student's debt. A Parent PLUS loan is the parent's, and the parent repays all of it.

Turning the offer into a borrowing number

Federal Student Aid defines net price as the cost of attendance minus the grants and scholarships in your offer. Cost of attendance covers tuition, fees, books, supplies, food, and housing. It can leave out costs like a long commute, which you can add yourself when comparing schools.

Here is a worked example for a dependent first-year undergraduate. The figures are illustrative.

Cost of attendance $32,000 Grants and scholarships − $14,000 Net price $18,000 Family savings and income − $10,000 Gap to cover $8,000

A dependent first-year student can borrow up to $5,500 in Direct Loans, and no more than $3,500 of that can be subsidized. That leaves $2,500 for a Parent PLUS loan, a private loan, or some other source. If the same gap comes back for four years, the total heads toward four times as much by graduation.

The loan amount printed on the offer is what the school chose within the limits. Federal loans stop at your cost of attendance after other aid is subtracted, and a school is allowed to cap a whole program lower than the law does. The Department of Education's loan-limit guidance adds that a student may always ask to borrow less than the amount they qualify for.

Before the first Direct Loan pays out

First-time student borrowers complete entrance counseling on StudentAid.gov, which covers their rights, their responsibilities, and the loan's terms. They also sign a Master Promissory Note, the legal promise to repay the loans, interest, and fees. One MPN can cover several loans for up to 10 years.

Sources

Written by Kaz (pen name). Figures are copied from the sources' published pages on the dates shown. We have not used these products. Corrections: contact form.