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Student Subsidized Loans

Russell Said:

Subsidized and unsubsidized student loans?

We Answered:

Subsidized loan is a loan where the gov't pays off your interest. You pay the original amount six months after you graduate.

Unsubsidized is where you have to pay off the interest. The rate is around 6.8% I think.

So you're gonna have to pay both amount in the future (spread into a period of 10 years I think). They are loans, not grants.

Diane Said:

Can i pay back student loans (subsidized) in full to avoid paying interest?

We Answered:


Hugh Said:

Subsidized student loans: Interest rate?

We Answered:

Subsidized loans are not interest free. They are "subsidized" by the government. Meaning, the government PAYS the interest while you are enrolled in school and for the 6 mo grace period after you graduate or drop out.
You do not have to pay any payments (interest or otherwise) for a Stafford loan while you are enrolled at least half time as long as the school is an approved school.

This book has a good section on federal stafford loans.…

Sean Said:

Will I pay back Federal Stafford Unsub/Subsidized student loans faster than private loans?

We Answered:

Never, ever, ever payoff Stafford before your private loans. Unless you have private loans with a lower fixed interest rate than your Stafford loans.

Financially savvy borrowers payoff the higher interest rate debt first. I usually advise students to get the lowest monthly payment on their Stafford loan and use the extra money to double up on private loans. I know a lot of rates on private loans are low right now, but when the market recovers - rates are going to climb because they are variable and not fixed, and fluctuate based on the market.

Once you have paid off your higher interest rate debts then you can focus on doubling up and paying off Stafford faster.

Maxine Said:

What is a good corporation to get subsidized student loans from ?

We Answered: - it provides some tips about applying to US federal and state grants for college students.

Mabel Said:

I have some subsidized student loans, I want to know?

We Answered:

As long as you are in school at least part/half time and you are in a federally funded school the government will continue to pay the interest..

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Stacey Said:

How much is the interest in subsidized student loans?

We Answered:

Interest is the same on a subsidized or unsubsidized loan. The current rate is 6.54% variable (up from 4.7% variable prior to the July 1st deadline) for a loan prior to june 30, and 6.8 fixed after July 1st. What you get with a subsidized loan is the government's help. Basically, when you are in school, in deferment or in your grace period (first 6 months after graduation) the government pays the subsidized portion of your loans. Unfortunately, the unsubsidized portion accrues interest once it has originated.

P.S. regarding answer #1: the loan will not go up to 8 or 9% on your staffords because the current cap on the program for a stafford is 8.25%. The interest rate changes once a year and does not fluctuate like the interest rate on a credit card. Finally, the government sets the rates, not the lender. What that means is, the lender does NOT set the rates. All lenders are subject to the rate set by the government and all lenders have to offer the SAME rates.

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