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Info on Loans that can be Deferred, please??

ecoazecoaz Registered User Posts: 48 Junior Member
edited September 2008 in Financial Aid & Scholarships
My eyes are bugging out from reading FinAid's website on student loans, other FA websites, specific college FA sites, as well as books this past week. Can someone please help me with remaining questions?

Prior to doing some further reading tonight, I thought Stafford was my ONLY option and that PLUS loans would need to be paid immediately by my parents (who are completely lunable to add another monthly bill to their budget). Tonight, I have hope this may not be true. If it helps my parent's AGI was $75K last year, but may be lower this year due to the economy. Only child.

STAFFORD: I'm aware of Stafford and the FAFSA application. My Stafford question is this: Am I allowed to take out the max of $5,500 freshman year if my parents don't qualify as long as I select UNsubsidized? Or is the unsubdized portion only $2,000 for freshman? I've read conflicting scenarios.

PLUS & PRIVATE LOANS: What's the basic difference between Parent Plus and Private Student Loans? It seems most people talk about Parent PLUS loan (after the Stafford), so is there something unfavorable (interest rate?) about the Private Student Loans? Also, who (or what) determines whether the borrower can defer all or part of the balance? I was under the impression that PLUS and Private Loans had to be paid back immediately after receipt of money, but have hope we may be able to defer these?

Could someone be kind enough some of these questions for me? Thanks!
Post edited by ecoaz on

Replies to: Info on Loans that can be Deferred, please??

  • sueinphillysueinphilly Registered User Posts: 4,207 Senior Member
    you can only get the Unsubsidized part of the stafford loan if you are deemed to have need. For freshman that is 3500. you can also add 2000 of unsubsidized. You can defer payments on these, but on any part of the unsubsidized, interest will accrue (you can choose to pay that interest or defer it too).

    you may also be lucky to get a Perkins loan, not all schools get that federal money and it's VERY limited. Interest on that is always deferred.

    PLUS are federal loans for parents, with fixed rate interest (around 8%). I believe they may have changed the rules to allow payments to defer until after graduation, but interest will accrue.

    as far as private loans, many of them have variable rates, they may allow payment deferment until after graduation, but interest accrues while you are in school.

    Be very very careful on how much debt you take on and figure out how much you will owe (especially if you are accruing interest while in school).
  • ecoazecoaz Registered User Posts: 48 Junior Member
    I would appreciate clarification from someone who can shed light on my question regarding the UNsubsidized (not subsidized) Stafford availability.

    Sueinphilly: Your reply is confusing to me because, although I may be in error myself, you refer in the first sentence of your reply to "UNsubsidized" when I believe you might mean "subsidized."

    Excerpt from my previous post:
    "Am I allowed to take out the max of $5,500 freshman year if my parents don't qualify as long as I select UNsubsidized? Or is the UNsubdized portion for NO NEED family as well only $2,000 for freshman?"

    In other words, if it's determined my family has NO need, can I still take out the MAX $5,500 as completely UNsubsidized -- I'm not asking subsidized -- but can I take it out as UNsubsidized?

    If I'm the one misunderstanding this or posting my original question in a confusing or erroneous manner, please excuse me! It was late last night!

    SueinPhilly -- I do appreciate your answering all my other questions as well! Please don't take my confusion with your Stafford question as unappreciative in any way at all :)

  • ecoazecoaz Registered User Posts: 48 Junior Member
    UPDATE: I just called a couple colleges I'm considering -- don't know why I didn't consider this before -- and they said that even if we do NOT demonstrate need, I'll still be able to take out the full $5,500 freshman year, but it would be UNsubsidized. So, we'll hope for subsidized, but at least we know the worst-case scenario.

    Thanks SueinPhilly and everyone else. I should have called the schools before posting.
  • NikkiiLNikkiiL Registered User Posts: 1,048 Senior Member

    The information you received from the colleges is correct; unsubsidized is not need based.
  • kelsmomkelsmom Registered User Posts: 15,148 Senior Member
    The only time you can't take out the whole $5500 freshman year is when your cost of attendance minus any aid (scholarships & grants) is less than $5500. In such a case, you'd only be able to borrow that amount (COA-aid).
This discussion has been closed.