<p>Federal Perkins Loan - 2 questions:</p>
<p>1) when is the amount due, at disbursement of the funds or after graduation?</p>
<p>2) is this interest free, or paid by the gov? If not, when does the interest start getting charged, at disbursement or at the time payment is due?</p>
<p>Perkins loan is a subsidized loan which means it is not interest free but the the government does pay the interest until you graduate or drop below half time. Perkins also has a grace period of 9 months after you graduate/drop below half time. After that you are responsible for paying the interest which is at a rate of 5% and repaying the loan.</p>
<p>thanks. How does this differ from the Stafford Federal subsidized loan?</p>
<p>Subsidized Stafford - interest rate = 6% (for 2008-2009 school year) Grace period = 6 months. May have an origination fee depending on the lender.</p>
<p>Perkins - interest rate = 5% Grace period = 9 months. No origination fee.</p>
<p>Perkins is the better loan right now. Sub Stafford loans issued 2010-2011 will have a lower interest rate than the Perkins loans (all things remaining equal - as in if the Perkins is still around and if it's interest rate remains the same).</p>
<p>OK, so it sounds like Perkins is subsidized. I wonder why the word 'subsidized' is not in the Perkins loan name while it is in the Stafford. Or is there an animal called Perkins Subsidized Loan? The FA letter simply says 'Federal Perkins Loan'</p>
<p>Because all Perkins are subsidized loans. Stafford loans can be either subsidized or unsubsidized so it is necessary to specify which one you are being offered.</p>
<p>thanks, swimcatsmom</p>
<p>Question on fed direct stafford loans, unsubsidized and subsidized.</p>
<p>my daughter has two loans for school yr 2009-10 …</p>
<p>fed direct subsidized stafford loan of $4,500</p>
<p>fed direct UNsubsidized stafford loan of $2,000</p>
<p>On each of these loans, how is interest charged and when is payment due?</p>
<p>Do they both behave like the Perkins loan - interest is calc’d at time of disbursement and picked up by the gov’t, but when the student is no longer a F T student, then </p>
<p>–the loans become due with the interest being paid for by the student at that time?</p>
<p>Does this have the net effect (as with the Perkins) -to the student - of being an interest free loan until a student is no longer a FT student?</p>
<p>No - only the subsidized loan is interest free untill repayment begins.</p>
<p>Subsidized Stafford loan - the interest rate is 5.6% for 2009-2010 disbursements. The interest is paid by the govt until the student graduates or drops below half time. Then the student is responsible for the interest and repaying the capital.</p>
<p>Unsubsidized Stafford loan. The interest rate is 6.8%. The student is responsible for the interest from the day the loan is disbursed. Interest may be deferred until repayment is due but will capitalized (added to the loan amount and interest charged on the interest). Repayment starts when the student graduates or drops below half time plus a 6 month grace period.</p>
<p>thanks. so the fed subsidized loan operates like the perkins, but the fed UNsubsidized does not.</p>
<p>it sounds like the fed UNsubsidized is just like any other loan you wd get in that the student in 3 or 4 years will not be paying back 2,000, but 2,000 PLUS the 6.8 interest from the time of disbursement. It looks like the deferred payment feature distinguishes it from a typical loan.</p>
<p>Can someone help me decide whether to accept this $2K uNSUB loan? If we are making …what…</p>
<p>less than,
equal,
or greater than </p>
<p>6.8 pct in another fund, then … accept it or reject it?</p>
<p>It is a no brainer on the subsized loans.</p>
<p>Taking the unsub loan amount really depends on your financial situation. Can you afford to not take the $2k? If you have an additional $2k laying around, then don’t take the unsub loan. If you would have to increase your private or plus loan borrowings to make up for denying the $2k in unsub loans, then take the unsub loan, as most private and all plus loans have a higher interest rate than the unsub loan.</p>