Can accepting student loans affect my eligibility for Work Study?
Eligibility for student loans and work study is based on remaining need. Eligibility for the Federal Pell Grant is determined first and the remaining eligibility (need) is what the Financial Aid Office uses to award student loans and/or work study.
Need is determined by taking the Cost of Attendance (COA) minus (-) the Estimated Family Contribution (EFC). For information on how the COA is determined click the following link. The EFC is derived by all answers that were provided on the FAFSA.
It is important to know that work study can be affected by accepting student loans and vise versa.
For example:
1. Ricky has an EFC of 0. His COA is 14,065. Ricky’s need is 14, 065 (14065 – 0 = 14065). Rick is then awarded the maximum Federal Pell Grant of $5,550. His remaining need is now 8,515 (14065 – 5550 = 8515).
It is NIC policy to initially award all students their maximum eligibility. Because Ricky is a dependent, freshman he is eligible for $3,500 in Subsidized Loans and $2,000 in unsubsidized loans for a total of $5,500.
Ricky now has 3,015 remaining in need (8515 – 5500 = 3015).
It is also NIC policy to have a maximum award of $2,000.00 in federal or state work study.
In this case Ricky would be able to accept his student loans and still be able to receive a work study award.
2. Jenny has an EFC 2,000. Her COA is 10,000. Jenny’s need is 8,000. Jenny is then awarded the Federal Pell Grant of $1900. Her remaining need is now 6,100 (8,000 – 1900 = 6,100). Jenny is an independent sophomore and is eligible for $4,500 in Subsidized Loans and $1,600 in unsubsidized loans for a total of $6,100. At this point, Jenny has 0 need remaining (6100 – 6100 = 0). Because she has 0 remaining need, Jenny would not be eligible for any work study funds because she accepted all of her loans.
If Jenny decided to decline her subsidized and/or accept a lesser amount of $4,500 in addition to declining her unsubsidized Loan she would have remaining need and could be awarded work study.