Ok, i just got approved for a subsidized loan. It says that the government pays the interest for me while i am in school. That means I still have to pay the interest, but I just have the choice of paying it later, is that right? My mom says that I should go ahead and pay the interest now. Can I do that? and should I?
2006-10-23 05:27:28 · 4 answers · asked by nicole r 2 in Education & Reference ➔ Financial Aid
i forgot to add that my mom said she would help me pay the interest.
2006-10-23 05:33:27 · update #1
I believe you can, yes. It all depends on what the source of the loan is.
My advice though- don't worry about it. Especially if you are a good student, in a good major with decent job prospects on the horizon.
Student laons are the best debt to have on your credit report, and you can pay them off over long periods of time. The interest is trivial compaared to other rates out there.
You are in school to learn, and to also have fun. Don't worry about money that you can payoff YEARS down the road!
2006-10-23 05:31:32 · answer #1 · answered by wvucountryroads 5 · 1⤊ 0⤋
No the government takes care of it while you are in school for a subsidized loan and after you graduate or drop out the loan will start accruing interest that you have to pay. Only the unsubsidized loans have interest that you have to pay while you are in school. Only certian people who are considered somewaht of low income can get this loan because the government pay the interest.
2006-10-23 13:07:07 · answer #2 · answered by KC 2 · 0⤊ 0⤋
With a subsidized loan, interest will not accrue while you are in school (the government pays the interest). Once you graduate, interest will start to build on any subsidized loans. Therefore, you will have no interest to pay on this type of loan until you graduate or are no longer in school.
With unsubsidized loans, interest does accrue while in school. You have the option of paying the interest while still in school. You can pay as much or as little of the interest as you want. If you have the means, I would strongly recommend it. It could potentially save you thousands in the long run.
2006-10-23 07:35:55 · answer #3 · answered by Melissa F 2 · 1⤊ 0⤋
Only when you enroll below 6 credits and graduate (6 months later) will you have to begin paying on the loan. Now, if you are receiving unsubsidize loan, you can pay the interest or let it accure to the principle.
2006-10-23 15:32:26 · answer #4 · answered by sunshine23511 5 · 0⤊ 0⤋