Apr 20, 2010
Your Financial Aid and Billing Questions Answered! (part 3)
Posted in: Afford
This post is the third in a series of four dedicated to answering all those questions that you asked, didn’t have time to ask or were afraid to ask during CPW. These questions were compiled at the Student Financial Services Presentation given by our very own Betsy Hicks, Executive Director of Student Financial Services.
Scholarships, Loans and Employment – oh my!
Q. If you received an MIT scholarship, are there any grade/cumulative requirements to maintain it?
A. MIT scholarship is awarded based on need only. There are a couple of federal grants that do require a minimum GPA of a 3.0 on a 4.0 scale to maintain (Federal Academic Competitiveness Grant [ACG] and the National Science and Mathematics Access to Retain Talent [SMART] Grant).
Q. Are there “merit” scholarships in 2nd – 4th years?
A. No. MIT awards undergraduate financial aid only on the basis of need for all 4 years.
Q. If we get an outside award this year, does that reduced MIT scholarship impact future MIT scholarship awards?
A. The answer depends on whether your outside award is renewable. If it is renewable, we include the scholarship amount in your financial aid package in future years and make the appropriate adjustments to your self-help and MIT scholarship. If the scholarship is not renewable, we do not make any future adjustments to your self-help or MIT scholarship. So to answer your direct question, if you get an outside award this year that is not renewable, the reduced MIT scholarship this year does not impact future MIT scholarship awards.
Q. Just to clarify, my son received a $25,000 scholarship from MIT. If he receives outside scholarship for $5,000, is that $5,000 reduced from the original $25,000 MIT scholarship?
A. We reduce the “self-help” or student loan and/or work component in your son’s package first and then the MIT scholarship. For example, if your son received a $25,000 scholarship from MIT and $4,000 in loans or work and subsequently receives a $5,000 outside scholarship, his loans/work will be reduced to $0 and the MIT scholarship by $1,000. If there are no loans/work, then his MIT scholarship will be reduced by $5,000 in this example.
Q. Can outside scholarships help to cover the amount required for student contribution by, for instance, summer employment?
A. No we do not allow outside scholarships to reduce the student contribution.
Q. What is a Federal Stafford unsubsidized loan?
A. The Federal Stafford unsubsidized loan is a loan that is not awarded based on need, but which is awarded to meet the difference between the cost of attendance and other financial aid. The interest rate is 6.8% fixed and interest accrues while you are in school. If you choose not to make the interest payments while you’re in school, that interest amount will be added to the principle balance (capitalize) when you graduate.
Q. What is the maximum unsubsidized student loan each year? Does this come under the 10% income ratio repayment plan?
A. The maximum Federal Stafford unsubsidized loan is $5,500 for freshmen, $6,500 sophomores and $7,500 juniors and seniors. However, these limits are the maximum for combined subsidized and unsubsidized Stafford loans. For example, if you already have a $3,000 subsidized Stafford your first year then you would only be eligible for an additional $2,500 in unsubsidized Stafford.
As long as you are not in default, this loan is eligible for the income based repayment plan.
Q. Does the student keep money earned from work-study?
A. Yes. You will get a paycheck for the hours you work and you can use that money toward you bill, your personal expenses or however you see fit. If the position is not a Federal Work Study (FWS) position, or not using FWS funds, then you can earn more or less than what’s on the award letter. If you are working in an off-campus community service position funded by Federal Work Study, you will not be able to earn more than what you are awarded in your financial aid package.
Q. Regarding “work-study” are students paid $9.00 per hour in addition to their “work study” award amount? If not, as most unskilled jobs pay at least $9.00 hour (cleaning, waitressing, etc.), isn’t $9.00/hour exploitative given the abilities of MIT students?
A. $9.00/hour is the Institute’s minimum wage and is the minimum wage for all Federal Work Study positions. You are not paid “in addition” to what’s listed on your award letter. The number on the award letter is a guide that is basically saying “if you earn this much money you will meet that portion of your need.” You may work on campus or in a non-FWS funded position for more than what’s listed on the award letter. Many on-campus and off-campus positions pay much more than the minimum of $9.00/hour depending on the job and skill of the student. Our hourly wage rates vary widely and we do not exploit our students by making them work for less than what they are capable of earning. For more information on median wages and student employment, visit our website.
Q. What kinds of opportunities do students have in summers to earn money to help offset college expenses?
A. There are plenty of opportunities for work during the summer. If you are eligible for Federal Work Study during the summer (see your financial aid counselor to find out!), there are many exciting community service opportunities available. We also maintain a list of on-campus and off-campus summer jobs that do not require Federal Work Study. Find something you like, apply and have fun!
Q. Do students who receive need-based financial aid get preference over students who receive no aid when applying for on-campus jobs?
A. No – there is no preference! You do not even need to be a financial aid recipient to apply for an on-campus job or any off-campus job that is not funded by the Federal Work-Study Program. You would apply just as you would apply for any job and the department for which you are working funds your wages.
If you are an international student, your student visa restricts you to on-campus employment of .no more than 20 hours/week during the term. Please consult with the International Students Office if you are unsure whether you are able to apply for a job.
Finally, tomorrow we will be posting your questions about student expenses and paying your bill!