03.22.07
Subsidized Loans Vs. Unsubsidized Loans
As you now already now, Stafford Loans are Federal Aid awarded to students based on financial need. These are loans and not grants so they do need to be repayed to your lender, which of course means they accrue interest. What most students dont know is that there are two types of Stafford Loans, Unsubsidized Loans and Subsidized Loans. Subsidized Loans are awarded to the students with a greater financial need for the loan. The government pays interest on these loans while the student is in school. This means that the student does not begin accruing any interest on the loans until 6 months after graduation.
Unsubsidized Stafford Loans begin accruing interest from the date the loan is disbursed to the school. Although repayment of Stafford Loans is deferred until the student graduates from school you do still have an option of making interest only payments while in school. This arrangement can be made directly with your lender in order to save on interest paid over the long run. If you chose to defer your interest until you graduate the interest will be capitalized. This means that the interest will be added to the principal balance of the loan and you will then continue to accrue interest on the total balance.
The Student Loan Network: Stafford Federal Student
Loans, Parent PLUS Loans, Student Loan
Consolidation, Private Student Loans, Education Loans/College Loans
deepak student loans said,
August 2, 2008 at 3:24 am
For many students, student credits are sought at the start of their college career. Most students do work in a part-time job; however, this is not always enough to cover the many expenses of college. With student credits, the student can keep their attention on things such as studies and classes, without having to worry about many expenses. The great thing about student credits is that for the entire time you are in college full-time, the loan will not need to be repaid until you have finished college for good and graduated in your degree.
twyla royston said,
December 14, 2008 at 9:41 pm
i want to say thank you for this site. it really helped me with all questions that i needed to be answered!!!
moniqueleonard said,
December 15, 2008 at 8:23 am
Thanks, Twyla!
Kathy Brumfield said,
April 28, 2009 at 11:06 am
My daughter is 18 and will begin Univ Of Arkansas in Fall 09- this Fall — she got word that she received 5500dollars in Stanford unsub loans for 09-10 yr — where and who do I see to get this thing called “Parentplus “loans — the university?/ their finance dept — How is a ParentPlus loan different from just walking into Bank Of America and asking for a college loan — I sure need help with this — plan to sell the house to downsize my indebtedness but that may not be soon enough .. tuition is $15,000 a yr so my part is 10,000 oh my –please repsond — and THANKS!
Kathy B in Missouri
moniqueleonard said,
April 28, 2009 at 12:42 pm
Kathy – this web page will answer nearly every question you have:
http://www.parentplusloan.com/plus-loans
PLUS loans are federally guaranteed loans which you can get from many banks or from the government directly. Walking into Bank of America and asking for a “college loan”…well, I’d be careful about that. Banks make more money on a Private loan, which is a much worse loan for the borrower. Always maximize your federal student aid before getting private loans
Money & Finance said,
June 23, 2009 at 3:28 am
As I have Stafford subsidized loan experience I’ll speak for it. I graduated from college 4 years ago and I’m in the middle of paying off my loan. Those having no other option before them check this one out. That’s very helpful and unlike unsubsidised one it leaves you alone with your studies and only afterwards reminds of itself.
RIck Roudebush said,
July 5, 2009 at 12:43 pm
What happens after we send in the promissory note to the bank we have chosen to apply for a Stafford loans?
Thank you.
RIck Roudebush said,
July 5, 2009 at 12:57 pm
If I wanted to pay the monthly interest on a $2,000 unsubsidized Stafford loan @ 6.8% while my child is in college, how would I calculate the mointhly interest I would pay?
Thank you.
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October 13, 2009 at 8:36 am
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