Student loans, grants, etc. Please help!?

Question

I just got my award info from my school. Here it is:

Financial Aid Award Fund Status Amount
Fdrl Direct Subsidized Loan Offered $5,500.00

Fdrl Direct Unsubsidized Loan Offered $5,000.00

Ohio Instructional Grant Accepted $1,290.00

Ohio Leader Scholarship Accepted $6,230.00

Ohio Resident Scholarship Accepted $4,850.00

Federal Pell Grant Accepted $4,050.00

Federal Perkins Loan Offered $2,500.00

Fed. Supp. Ed. Opp. Grant Accepted $1,000.00

Total $30,420.00

My question is, what's the difference between the unsubsidized and subsidized loans? What about the grant? What is so good about the Federal Perkins Loan? Should I take the loans that they are offering, or go through Sallie Mae (I already have several loans with them)? Thanks alot for answering.

prtybrwnskin, i'm married and legally on my own. I'm in school and work, so I only make so much. I guess the government finally decided I was worth something. :)

Answer 1

Subsidized loans are loans that the government pays the interest on while you are in school. These are a good thing, if you need a loan. You have to pay the interest on any unsubsidized loans during school, though you don't have to start paying on the actual loan until you are out of school.

Grants are great, because they don't have to be paid back. Think of them as government sponsored scholarships.

If you need the money, I would take whatever subsidized loans you can get first. The Perkins loan is subsidized, and also has a fixed interest rate. Sallie Mae is just a servicer of the government loans, so I would definitely go through your financial aid office. I would not try to secure loans on your own unless $30,000 is not going to cover your expenses.

Answer 2

You appear to be attending a fairly expensive school, since you have not only a full Pell Grant and an SEOG, but a pretty full boatload of loans, plus you are in your junior or senior year based on the amount of subsidized loan you've been offered.

Obviously one accepts all the grants, which include those scholarships first. Then one sits down with one's bill and subtracts HALF of these amounts from the fall bill (Why? Because only half of this money is available for fall if you are in a two semester college. If your school is in quarters or trimesters divide by 4 or 3 accordingly, which is how you should be billed.) and see how much you have left to pay. Then look at your loans by priority of interest accrual and interest rates (you need to attend Entrance Counseling which can be done on-line to do a good job of this part), and accept your loans by the lowest rate first. This would be the Perkins, since it is a fixed, 5% interest rate loan with the first payment coming 9 months after you terminate school. Then go to the subsidized loan, since, while it has a higher rate, it will be a fixed rate after July 1, 2006 again. Then, last, and hopefully least, the unsubsidized loan, because this does begin to accrue interest from the time of disbursement. While you can forego paying the interest while you are in school at least half time, this is capitalization, capitalized interest is added to the original principle which compounds it. If you must accept the unsubsidized loan ask for the amount to be lowered to the point where you have all of your bill paid with some money left to buy books with. Don't borrow more than you have to. Far too many students leave school with enormous loan debt that they cannot handle and defaulting on a student loan will affect your credit for years.

The Sallie Mae loans you already have are the same loan as the Direct loans. The difference here is that the Sallie Mae loans are offered through a commercial lender and the Direct loans come through the Department of Education. They have essentially the same terms and rates. You can ask your school to continue to allow you to borrow through Sallie Mae if you wish.

Answer 3

Subsidized loans are awarded on the basis of financial need. You won't be charged any interest before you begin repaying the loan because the federal government subsidizes the interest during this time.

Unsubsidized loans charge interest from the time the money is first disbursed until it is paid in full. The interest is capitalized, meaning that you pay interest on any interest that has already accrued. One way to minimize how much interest accrues is to pay the interest as it accumulates.

The grant is money that you do not have to pay back. As long as your keep your grades where they need to be and your need doesn't change you will keep getting the grants.

Personally I would use those loans, they are set through the federal government so they will typically have a lower interest rate. Also these loans are eligible for deferment after college. If for some reason you are going through financial difficulty you can get your loans deferred for a year.

Answer 4

The difference between the subsidized and unsubsidized loan is that the interest accrued on the subsidized portion is paid by the government. You don't pay the interest until you leave college whereas the unsubsidized, you pay the second you take out the loan.

The Perkins loan is given to a small number of students that need more subsidized amount in loan based on need.

Sallie Mae is just the middle person between the student and BankOne. I would just go with the school's preferred banks (if they have any) so that the process of taking out loans is easier since the school is dealing with them on a daily basis. Otherwise, just stay with Sallie Mae since it sounds like you are already familiar with them.

Answer 5

The difference between and unsub and a sub loan is that for a sub loan the government will pay the interest for it while you are still a student. An unsub loan is still a good deal because there is a cap on the amount of interest they can charge you. As for a grant, grants a usually money you get and never have to pay back, so those are always good. As for Perkins loan, this is a good deal too because if you are going into certain fields like nursing or teaching and some other jobs that I can't think of off the top of my head, your loan can be forgiven. You don't have to pay it back. I'm not completely sure on the logistics of it all but I'm pretty sure that's how it runs. As for taking these loans or a Sallie Mae loan, I suggest the loans they are offering and if these aren't enough, then go ahead and take the rest out on Sallie Mae. Hopefully this helps.

Answer 6

Subsidized means interest does not gather while you are in school and on the unsub it accrues. The loans you would get from sallie mae are basically the same. Your school just chooses to use the government as their lender.

The Perkins loan is fixed at 5% and you do not have to start paying it back until 9 months after you graduate or you drop below 1/2 time. If you are going into education or a health field a portion of it can be forgiven.

Answer 7

OK-- First, Subsidized means the government pays the interest on the loan for you and unsubsidized means you pay the interest on the loan. Federal Perkins loan is just a different type of loan that is offered depending on your need status. If you take the loans remember you have to pay them back. However, they can be a nice nest egg for you to use so you don't have to work while you are in school. You can use them to pay for your car, rent, computer, etc. You should be able to choose who your loans go through. Like mine are through Chase but Sallie Mae services all of them. Obviously your grants will be applied to your tuition first then if any is left over you will get a check for that from the school. So taking the loans just depends on the yearly cost to attend school there in Ohio. Good luck! I hope this helped.

Answer 8

Grants are great because its basically free money, you dont have to pay them back. So enjoy getting those.

As for the difference with the subsidized and unsubsidized loans, unsubsidized loans interest starts to build up as soon as you get the loan. While with the subsidized the interest doesn't start till you are out of school for 6 months. So thats a nice perk. As for should you just take the sallie mae loans, what happens when you sign the promisary note for your loans you will be asked what provider you want to handle your loans, Sallie Mae will be one of those. So take them and just choose that. Hope this helps

Answer 9

I'm not familiar with the differences, but don't go with the loans if you don't have to. There is a lot of interest added to the loans. Stay with the grants and scholarships. Remember, you can apply every year as long as you are a full time student.

Answer 10

scholarships and grants are free money. take them.

if you can, stay away from UNsubsidized loans.

"subsidized" means that while you are in school full time, the government pays the interest. that means if you borrow 10,000, when you get out of school, it will still be 10,000. not 12,000 or whatever it would be with interest.

with unsubsidized loans, you pay the interest yourself. the only government loan that is unsubsidized (i believe) the the stafford loan. if you can, take that one.