Took out a subsidized loan...then school changes it to unsubsidized?! How?

kelsmom
Thu, 21 Apr 2011 13:28:08 +0000

Actually, I was thinking about the unsub loan question. Yes, it has to be split between the two terms, but the interest begins to accumulate on the date it is actually disbursed. So if it is paid in January, the interest should begin in January even if it’s split between the two terms. If there is an existing loan that has been disbursed and a new amount is added to that loan record, the interest would be retroactive. It sounds like maybe your son had a loan that paid out, canceled it, then that loan record was used to reinstate the original loan.

Now that all schools are DL, they have been instructed to create a new loan record for any increases. This avoids the retroactive interest issue. It gets sticky if a student is no longer enrolled & the original record has to be used (because it is too late to use a new record once the term is over), though.