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How does one determine the amount of loan that they need to apply for?

I recently got accepted into college, however, my financial aid award does not cover my entire balance. I would be left with $11,604/year and was wondering, if worst comes to worst, how much money would I need to apply for? For example, would I need to apply for a $12,000 loan or a $48,000 loan? This is assuming that my balance owed remains at $11,604 for my entire bachelor degree and I could not seem to find a clear answer online. Thank you for your time!!

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Syed’s Answer

Hi Ralph, you should only apply for the amount you need each year to meet estimated expenses. Be sure to include the cost of room & board, books, and other miscellaneous living expenses in addition to tuition. And you should project out for the full 4 years of your degree, not just the first year or first semester. The school's financial aid office should have annual budgets that estimate all of the above (tuition, room & board, etc.). Here is a rough example: say all expenses for your first year are $20,000 and you have a financial aid award in the form of a grant (you don't have to pay back grants) of $8,000, then you would have to borrow $12,000 for that year (most likely in the form of a federal loan, be careful to avoid private student loans, if possible). But that is just your first year. You should also assume that expenses will be $20,000 or a little more (costs usually rise a bit) for each of the remaining three years. Most likely, your financial aid grant of $8,000 will be renewed annually (schools plan ahead for this when they award you the grant for the first year). So each of the remaining three years, you will have to borrow approximately $12,000. In total, you would have borrowed $12,000 x 4 = $48,000, which is a rather substantial sum. While you are in college, you should consider which majors are in demand with employers and estimate what your future salary might be after your graduate so that you can pay back the $48,000 in student loans that you borrowed. Please be sure to work with your high school's guidance counselor and your prospective college's financial aid office to estimate all the numbers above. I hope this helps!
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Lorraine’s Answer

Based on my college experience with student loans, this goes through the financial aid office. They review your minor and major and total cost for the semester. Each semester this process will need to continue if this is your only way to pay for college. Please know you can also apply for scholarships and grants if you are eligible and the college can enter your information there first before going to student loans.

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