financial aid q - help please

molliebatmit
Wed, 30 May 2007 07:39:43 +0000

[url=What is a Subsidized Student Loan? | Edvisors]Here[/url] is the info on federal loans. The typical Stafford loans have a relatively low borrowing limit per year.

Both subsidized and unsubsidized loans are guaranteed by the U.S. Department of Education either directly or through guarantee agencies. Nearly all students are eligible to receive them (regardless of credit score or other financial issues). Both types offer a grace period of six months, which means that no payments are due until six months after graduation or three months after the borrower becomes a less-than-full-time student without graduating. Both types have a fairly modest annual limit. The limit for the academic year beginning in 2007 is $3,500 per year for freshman undergraduate students, $4,500 for sophomore undergrads, and $5,500 per year for junior and senior undergrads.

Only the subsidized Stafford loans have deferred interest (meaning interest will only accumulate after you’ve dropped below half-time enrollment in a school for more than six months – if you go directly to graduate school, your loans will be in deferral until you finish); on other types of loans and on unsubsidized Stafford loans, the interest begins to be due as soon as the loan is disbursed.

Those types of loans are in the student’s name, although I’m admittedly not sure what would happen if the student were under the age of 18.

If you need more loans than the per-year Stafford limit, I believe you generally have to use outside lenders and their terms regarding interest.