Dude, Where's My Sub?

In an earlier post, I explained the difference between Subsidized and Unsubsidized Stafford loans. In it, I mentioned that you may not qualify for a Subsidized loan. So, where does it go?

It really goes nowhere. As long as your Cost of Attendance allows you to borrow the maximum in your firrst year, then you would be allowed to borrow up to a total of $9500 for independent students, and $5500 for dependent students. Typically this would be a combination of Sub and Unsub, with the usual being $3500 Sub and $6000 Unsub (for independent), and $3500 Sub and $2000 Unsub (for dependents). If you do not qualify for any Sub, you don't lose your eligibility for the total of $9500; you've just lost your Sub eligibility. Your $3500 Sub becomes Unsub. Even though the limits are $6000 and $2000, if you don't qualify for the Sub because of the Unmet Need being 0 or less, then you don't lose that amount of money. So your Unsub would be $9500 for independent and $5500 for dependent.

Since you must have an Unmet Need to be eligible for a Sub, then you have to have at least 3500 Unmet Need your first year to be eligible for a full Sub that year. So, what happens if you end up with something in between 0 and 3500 for your Unmet Need? All that means is that whatever amount your Unmet Need is, that's the amount of Sub you are eligible for. And just like before, whatever amount you are not eligible for will become Unsub. So, for example, if your Unmet Need is 2000, that means you are eligible for a $2000 Sub and the remaining $1500 would be added onto your Unsub.

This is a strange concept, and it is understable if you are confused. For our school, it doesn't happen often. The easiest way to know if this will affect you is to remember that your EFC plays a large role in deciding this. The higher your EFC is, the more likely this will affect you. Anything over 10,000 may or may not affect your Sub eligibility. Since this calculation is based on EFC, Cost of Attendance, and the Estimated Financial Assistance (everything that's used to pay tuition), each student's situation is a little different. You can have two students with the same high EFC, but one may have less Estimated Financial Assistance, and the other may have a much higher Cost of Attendance, these things factor greatly into the calculation and they may end up vastly different, or nearly the same.

As the old FA joke goes: it all just depends.