Is Daughter Obligated to Take Federal Loan?

Question: My daughter is finishing sophomore year at the local junior college. She has been accepted at a 4-year school, and has a good financial aid offer.

She now is afraid of the loan she'd take on for the last two years of college. She is talking about not continuing her education, and thinks she can get a job (I have my doubts).

I'd like her to continue the admissions process until she absolutely must tell them no, to see if she gets a job.

The college says the next step is to sign off on the award letter and accept the Federal Unsubsidized loan, and that she has only a few weeks to do so.

If she accepts a loan now, what happens if she decides against school next year?

I consulted with my financial aid guru, Ann C. Playe, former associate director of admission and financial aid at Smith College. Ann reported:

She can decide to forgo the loan. In fact, if she is NOT in school, she can't have it. Those loans pay directly to the school so if she is not enrolled, it would be canceled. Also, she can decide she just doesn't want it if she does decide to attend the school and ends up figuring out another way to cover the costs.

So that sounds like best-case-scenario for your daughter. She may also want to take a shot a private scholarships by completing the free questionnaire at FastWeb ( Once she's submitted the form, she will get a list of scholarships for which she is eligible. Some will be small--i.e., under $1,000 (and thus perhaps not worth the hassle of applying) and some will be big (and thus more competitive) but it will only take a few minutes of her time to register on FastWeb and to fill out and send the questionnaire, so I think it's worth a shot.