Subsidized Student Loans NOT Based On Need?

Paying for College
1

<p>My mom is convinced that there exists some sort of subsidized or interest-free student loan that is NOT based on financial need. Does this sort of thing actually exist?</p>

2

<p>No…</p>

3

<p>No, no such thing, unless there’s some private or local program she knows about. Sounds like she’s misinformed, unfortunately.</p>

4

<p>“Unsubsidized” Stafford Loans actually are subsidized by the Federal Government. Their rates are lower and the terms are better than private, market loans because of this. They are not granted based upon need.</p>

5

<p>yes, UNsubsidized loans ARE granted upon need. If your EFC is 60000 and your COA is 40000, you will not be shown to have NEED and any stafford loan you take will not be subsidized. OTOH, if your EFC is 5000 and the COA is 40000, you will get a SUBsidized loan because you have need (assuming COA is not met in full by other grants or scholarships)</p>

6

<p>Thanks! That’s what I thought, but she insists it exists because some 30 years ago, my father was able to get a subsidized loan for school, but they weren’t as well-off then.</p>

7

<p>Thirty years ago, low-interest loans were available to any student in my state (CA), regardless of need. My understanding is that because so many students defaulted on those loans, they eliminated them.</p>

<p>Today, Unsubsidized Stafford loans are available to any student, regardless of need. Their interest rates may be lower than commercial loans, but not as low as the Subsidized Stafford loans which are only available to qualifying needy students.</p>

<p>Contact your schools FA office. They should help you process your request for an Unsubsidized Stafford loan.</p>