wmurphy126

So, I am hearing a few statements about each ones... And I can't tell the difference or which one's interest is paid during college or not... but anyway, onto my question.

1. What is the difference between the Federal Subsidized Stafford Loan and the Federal Perkins Loan?

2. Do you pay interest or accrue interest for either of those loans while you are in undergraduate? If so, how much?

3. If they are both subsidized during college, am I allowed to take both (3.5k+1.5k), since then I will have over 3.5k subsidized?

Thanks for all the help!

NewEnglandMother

Perkins are awarded above/beyond the Stafford amounts for the neediest students. The Perkins is subsidized during school and starts repayment 9 months after you leave/graduate/attend less than full time. The rate is 5% (I think it still is) the aggregate limit of the Stafford ($31k for unsub/sub) is not affected by the Perkins. They are separate programs. Perkins has a max of $4k per year for a total of $20k for undergrad. You school determines the amount you are eligible for up to $4k per year.

Take all subsidized you are eligible for before accepting the unsubsidized.

swimcatsmom

The subsidized direct (or Stafford) loan has an interest rate this current (2011-2012) year of 3.4%. It is scheduled to jump to 6.8% for loans disbursed from July 1st, but this is been fought over by the politicians right now. Subsidized means that no interest accrues on it until you graduate. Subsidized direct loans disbursed up until June of this year also have a six month grace period after you graduate or drop below half time where no interest accrues. Loans disbursed after June this year do not have the grace period for interest (interest starts as soon as you graduate or drop below half time). Repayment starts 6 months after you graduate or drop below half time.

The Perkins loan is a subsidized loan, so no interest accrues until you graduate or drop below half time. It also has a 9 month grace period after you graduate/drop below half time before you start repaying it and during which time no interest accrues. The interest rate is 5%. It is a completely different loan to the direct subsidized loan so can be awarded in addition to the direct sub loan. However it has very limited funding. It is what is called campus based aid, meaning schools have only a certain amount of Perkins funds and they decide the criteria on which to award it and the maximum they will award. Once they have awarded what they have, they can not award any more. It is very limited funding and schools usually do not have enough to award to everyone who meets their criteria. (my daughter has been awarded it some years and not others and always differing amounts). It is a program that they talk about changing to unsub every year, but I don't think that has happened yet.

Both are need based loans.

AdeleRose

Swimcatsmom, you wrote "my daughter has been awarded it some years and not others and always differing amounts" -- I wondered, if we take the subsidized Stafford plus the Perkins for freshman year, and the Perkins isn't offered sophomore year, will we get offered the unsub Stafford again, after turning it down this year?
thanks!

swimcatsmom

You should. Some schools don't automatically offer unsub loans, instead offering parent PLUS loans. But if the don't, you can request the unsub loan. All students that are eligible to file FAFSA are eligible for the unsub loans as long as total of all aid (including scholarships, grants, loans, WS etc) do not exceed the COA of the school.

askq

what is the fee for Stafford(unsub) and Perkins loan?
are both loans for students, not parents?
Thanks