Should I take an unsubsidized loan or pay from savings

Could you please advice. We received a 5K unsubsidized loan. Should I take that or pay from my savings . If I say No to unsubsidized loan in Year 1 , will they offer me again in year 2 ?

You can take an Unsub loan any or all years in school. One way to work it is take the loan and pay the interest each year so it doesn’t accrue. But what would you be doing with the money in your account? Will you make more than the interest you pay for the Unsub loan? If not then it really makes more sense to pay from your account and don’t take the loan.


You will always be eligible for the unsubbed loans, but if you don’t take it during that school year, it doesn’t roll over. Freshman year the max is $5500. You can take it at any time during freshman year (up to about 2 weeks before the end of the spring term), but once you move on to sophomore year, then you are borrowing from a new ‘pot’; you can’t borrow double in one year even if you didn’t take it the year before.

If you are unsure, I’d say just put it on hold for now and reassess in the spring. If it looks like you will need it, take it then. There is an administrative fee (1%).

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Thank you.
Do you know what the interest rate would be.
My 1st kid is getting into UG now and the 2nd one will go to college next year . So I am assuming since kid 1 got $5,500 . Kid 2 also will get $5,500 next year . I mean $5,500 per student not $5,500 per family per year.

They will announce the interest rate on July 1, but I think it will be about 2.75% (same as last year)

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Interest rates for the upcoming year are announced in May. They are based on 10 year Treasury notes + a fixed percentage (this is a Congressionally mandated formula ). Watch this page to see the new interest rate once it’s announced: Federal Student Aid.

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