<p>Was just talking to a friend whose daughter is starting college in the fall, undergrad. She said they were able to get a loan that had zero interest as part of her financial aid package.</p>
<p>Is this true?</p>
<p>Also, is this loan, or an equivalent, available for grad school?</p>
<p>Thanks for any info</p>
<p>She may have been talking about a subsidized student loan through FAFSA. The government does not charge interest on that while the student is in college, but the interest begins to accrue once the student graduates. There is a limit to how much can be borrowed ($5,500) for the freshman year and it gradually increases for undergrad years. Whether the loan is subsidized or unsubsidized is determined by family income. </p>
<p>there are no sub loans for grad school.</p>
<p>Even for undergrad, of the $5500 that the student is able to borrow, only 3500 is subsidized</p>
<p>Montegut…</p>
<p>the person is probably confused. she either misunderstands the subsidized loans that undergrads sometimes gets or she thinks that because no payments are made while in college, the loans are interest free.</p>
<p>either way…none of this applies to grad school.</p>
<p>The only zero interest loan I have seen is from the college itself. It is rare but some (at least one I am familiar with specifically) offers zero interest loans from a “loan fund” from the college directly to the student. As long as the student pays the loan back according to schedule (starting 6 months after grad) the loan is zero interest for the life of the loan.I believe this is reserved for students with need and can be on top of any Fed loans.</p>