« Back to the grind. | Main | Physician Assistant Information Session »
January 24, 2007
Loans, Scholarships, Grants.
With working with many families, they are scared of the word, “loan”. I don’t necessarily blame them, but an education does come at a price. Scholarships and grants are ‘free’ money that doesn’t need paid back, but loans are a different story.
Students should be applying for grants, scholarships, and loans well before the deadline for better results. With working with loans, there is terminology that is a bit foreign! Hopefully the following will help out.
Unsubsidized loan: An unsubsidized loan is not awarded on the basis of need. You’ll be charged interest from the time the loan is disbursed until it’s paid in full. If you allow the interest to accrue (accumulate) while you’re in school or during other periods of nonpayment, it will be capitalized. This means the interest will be added to the principal amount of your loan, and additional interest will be based on that higher amount. (www.studentaid.ed.gov)
Subsidized loan: A subsidized loan is awarded on the basis of financial need. You won’t be charged any interest before you begin repayment or during deferment. The federal government “subsidizes” the interest during these periods.
After you graduate, leave school, or you drop below half-time enrollment, you have a period of time before you have to begin paying it back. If you are a parent reading this and you have a FFEL or Direct Plus Loan, you won’t have a grace period. Repayment generally begins within 60 days after the loan is fully disbursed. Otherwise, this grace period is:
Six months for federal (FFEL) or Direct Stafford Loan
Nine Months for Federal Perkins Loans
(If you’re a parent reading this and you have a FFEL or Direct PLUS Loan, you don’t have a grace period—repayment generally must begin within 60 days after the loan is fully disbursed.)
Check out www.studentaid.ed.gov for more in-depth information!! It’s worth the read.
Posted by AshleyHoffman at January 24, 2007 4:51 PM