My sons will both be taking out federal student loans only. I see that after July 1 the rate drops almost a half a percentage point.
Both of my sons clicked “accept” on their financial aid offers of student loans, but neither have completed the entrance counseling or signed a promissory note/loan agreement yet.
Is it better to hold off until after July 1 to do these things at this point? Which rate will they get?
thanks
I am no expert but I would expect it would be the rate in effect at the time of disbursement.
The rate is set for the year on July 1. They will get the rate for that school year (when disbursement is make), so 7-1-19 to 6-30-2020 will be the new rate.
And that rate is locked in for the life of that loan. The interest rate may very well be different next year … but the new interest rate will only affect the new loan.
Is there any reason why you don’t just wait and apply until July 1?
OP is saying her children check the ‘accept’ box on the portal. That doesn’t matter. The interest rate is set July 1 and no disbursements will be made until after that date, no earlier than 10 days before the semester starts.
Thanks, I wasn’t sure how this works since we haven’t done it yet.