I only recieved 20% of what I asked for with a Stafford loan; Is there anyway to appeal this decision?

Question

I only recieved 20% of what I asked for with a Stafford loan; Is there anyway to appeal this decision?

Answer 1

I don't understand what you mean by "asking" for a particular Stafford loan amount. What you may have run up against are the government's maximum annual Stafford loan awards.

Starting with the new academic year, the annual Stafford loan award has been increased to $5500 for first year, dependent undergraduate students. $3500 of that total can be awarded in the form of a subsidized Stafford loan, and a maximum of $2000 can be awarded in the form of an unsubsidized loan. Those are absolute, statutory maximums, and there is no opportunity to "petition" for an increase.

After your first year, the maximum amounts go up:

$6500 ($4500 subsidized/$2000 unsubsidized) in year two

$7500 ($5500 subsidized/$2000 unsubsidized years 3 and 4

There are also lifetime maximums - no student can borrow more than $23000 in total subsidized Stafford loans during their undergraduate "career".

Qualification for the maximum SUBSIDIZED Stafford loan is based on a financial need assessment by your school's financial aid office.

Qualification for the maximum unsubsidized loan does not require a demonstration of financial need.

The financial aid office at your school based its aid offer to you on the basis of an analysis of your financial need. Basically, they take the "cost of attendance" at that university, and subtract the expected family contribution (EFC) that the Department of Education computed from your FAFSA form. The difference between cost of attendance and your EFC represents your "need".

Financial aid offices do the best they can to meet your demonstrated need, but there are only so many sources of financial aid available to them. If you don't qualify for government grants (Pell, etc), you will still receive a Stafford loan offer. Keep in mind that you won't be eligible for the maximum Stafford award unless your EFC is sufficiently low. That's beyond your school's control.

If Staffords and any grants that you might be eligible for don't meet your need requirements, the  financial aid office may turn to institutional grants and/or scholarships. You'll have to check with your school to make sure you were considered for those.

Most students do NOT receive a financial aid offer that completely covers their demonstrated need. That's why many parents turn to the government's PLUS (parents' loan for undergraduate students) loan program. The PLUS program loans money to the parents of undergraduate students at very competitive rates. However - unlike the Stafford - the PLUS eligibility for the PLUS loan is based on the lender's analysis of your parents' credit history.

Finally, there are private loans and scholarships. Private educational loans are available from many lenders, but they tend to be a little more 'expensive' than PLUS loans. If you decide to investigate private loans, be very careful, as there are many many educational loan scams (quite a lot of those people cruise the financial aid board here and post links to their websites).

Unfortunately, it is likely that financial aid will only cover some portion of your educational expenses. It is up to the student and family to make up the difference. As you might imagine, most of that "difference" comes in the form of borrowing. Remember - borrow responsibly - all of that money has to be paid back some day, and the payback period for student loans generally lasts from 15 to 20 years. The last thing you want to do is start out your new working life with the albatross of an unmanageable student loan around your neck.

Good luck to you!