I am a student trying to reduce interest accumulation on unsub loans while in school. Other than ubering and cutting back and clipping coupons until I’m blue in the face I was curious if this anyone has experience with this.
I’m going to be requesting unsub loans for many years and I was thinking what if I requested the loans later than the start date of the semester. I saved up enough from working weekends to live about 2-3 months on cash saved and so I was curious if anyone has waited later in a semester to request loans and whether or not that may push back the initial start date of the loan?
Do the entities that loan money for student loans (Nelnet?) happen to just start an unsub loan on the date the school semester starts or when they actually receive the request to disburse funding from the dept. of education?
Also, is there any adverse actions that could happen in regards to late loan requests (fees)?
Thank you for your time
The interest on unsubsidized loans begins to accrue the date they are disbursed.
You know…you can also pay the interest off. That’s something you can probably do with your earnings.
If you don’t apply for and take the loans before the semester starts…will you have enough money to pay your bills when the semester starts?
I would suggest you think of the following:
If you really don’t NEED the loan money, don’t take it at all.
You could use your earnings to pay the interest on your loans (sort of subsidizing them yourself).
You say you will be taking these loans for “years”. Could you elaborate? There is an aggregate amount limit for these loans for undergrads...so...it’s not like you can take them forever.
If some of your loans are subsidized, probably only $2000 in unsubbed loans per year, $1000 per semester. You are talking the ~4% interest on $1000 for 2-3 months. Your savings will not be substantial.
If you don’t need the money, don’t borrow it. If you need it for your tuition, you’ll need it at the beginning of the semester.
Your loan principle sits in one bucket & your interest that is accumulating sits in a separate bucket until your grace period ends (6 months after your graduate, leave school or drop below half time). While they are separate, it doesn’t matter when you pay the interest. Once the grace period ends, though, your interest gets rolled into the loan & you are paying interest on the interest. Paying the interest before the end of the grace period keeps your overall costs lower.
Borrowing only when you need it is really smart - putting off borrowing means less interest in the long run. Don’t borrow until you need it.
Thank you so much. I never thought about the interest as two buckets and I like that comparison. I am aware of how quickly the interest will start to build up after the grace period. I think I will try to pay down the interest with anything extra I can come up with in the meantime.
I believe I am on track to borrow around $25k for two more years. I have borrowed approximately $15k in unsub and $15k in sub. According to the school I have 5 years left to finish the engineering undergraduate degree before the loans become due. Following that I would like to apply for graduate school, which I believe puts the loan interest back on hold while in grad school.
Budgeting through January of 2019 is another goal. Also, I was considering going out of state for a class so that I can get ahead (or prepare) for the end of my sophomore year. I would need to borrow now so that the funds are available when registering/paying for a winter course (over the holidays).
I appreciate all of those suggestions!
You will need to look at how your unsubsidized loan is paid out depending on where you go to school. In my experience there is no control over the funding date, it is automatically the day tuition is due for the semester.
Agreed on not borrowing unless you need it. You do not have to take the full amount offered.
Are you saying you have five more years left to complete your undergrad degree in engineering?
Also, are you an independent student for financial aid purposes? If not…the max federally funded loans are as follows…
Freshman $5500
Sophomore $6500
Junior $7500
Senior $7500
How have you already borrowed $30,000 in subsidized and unsubsidized loans?
Are some of these Parent Plus Loans?
And as I said on your other thread…going out of state and laying out of state costs to take a course during won’t term is something you need to think about a little more.
Given your financial concerns, and loans…and the need to borrow to take this OOS course…I would strongly suggest that you get a job instead. Make money…instead of spending it.