<p>How do we know which loans/offers to accept and reject? Is it best to just generally accept everything the college offers?</p>
<p>No! First separate out the direct (billable) costs from the indirect/discretionary ones (books, travel, etc.). Make choices about your room and meal plan. Find out when the bills will be due for each semester and plan how much you will need above your grants and savings. That is your loan need for the college and you can add back a reasonable amount for books, etc. if you’re sure you won’t be able to come up with it otherwise (but the school probably won’t give you this money by the beginning of the semester). </p>
<p>Next, you should take the time to research and write down the terms of each loan! In general you’ll want to accept the subsidized Stafford and Perkins, if offered, first. Then the unsubsidized Stafford. Many parents prefer to look for better rates than the PLUS loan offers, but the other terms may not be as favorable.</p>
<p>You can find out all about the various loans here:
[FinAid</a> | Student Loans](<a href=“Your Guide for College Financial Aid - Finaid”>Student Loans - Finaid)</p>
<p>If you care to post more details about what you’re offered and what your costs are, I’m sure people here can help you decipher it!</p>
<p>The best loans are the ones that say ‘subsidized’ in front of them. A subsidized loan means the govt will pay the interest on them until you graduate or drop below half time. Subsidized loans are:</p>
<p>Perkins loan. Currently the best federal student loan. The govt pays the interest until you graduate or drop below 1/2 time plus for a 9 month grace period. There are no origination fees. The interest rate is 5%.</p>
<p>Subsidized Stafford loan. The govt pays the interest until you graduate or drop below 1/2 time plus for a 6 month grace period. There may be up to 3% origination fees. (meaning if you borrow $1000 you may actually get only $970). Some lenders waive the fees. The interest rate for loans for the 2009-2010 school year is 5.6%.</p>
<p>Other loans will not be subsidized so you owe the interest from the day the loan is disbursed. Some loans the interest may be deferred until graduation but this means interest is accumulating and you are paying interest on the interest. Two other loans tht might be in your award are</p>
<p>Unsubsidized Stafford loan. Interest rate is 6.8%. May have up to 3% in origination fees. </p>
<p>PLUS loan. Is a parent loan. 8.5% interest rate.</p>
<p>You may also see loans described as subsidized or unsubsidized direct loans. Thes are basically the same as the Stafford loans but the school acts as a direct lender. Same rules. May or may not have origination fees.</p>
<p>If you are able to attend without some of the loans then when choosing which to keep - Perkins is the best, followed by subsidized Stafford.</p>
<p>Thanks SwimCatsMom!</p>
<p>If I accept the subsidized Stafford loan, do I get it from the government or do I go to my bank or credit union for funding? The schools are not direct lenders.</p>
<p>When it comes time to repay 6 months after graduation, is the outstanding balance just the amount borrowed minus the origination fee? For example, I borrow $15K over the course of 4 years (and pay $300 in fees). When the loan comes due, is the amount $15K? I guess what I would like to know is when do they start adding interest into the amount due. If I pay off the loan say 5 months after graduation, do I only pay back the $15K? And, which lenders wave the fees!?!?</p>
<p>Finally, if I accept the loan on my financial aid offer today, can I decide not to take the loan when it comes time to sign the promissory note in a few months?</p>
<p>Thanks you for sharing your expertise with all of us.</p>
<p>If your school is not a direct lender you go to a bank. The school should have a list of lenders. You do not have to go with their lenders but it is a place to start looking. Often the different lenders offer various incentives - no origination fees or reduced interest rtes after so many on time payments etc etc. My personal inclination is to go for the ‘bird in the hand’ and take what benefits me now - the no origination fees - rather than wait for the possible reduced interest rates down the road sometime.</p>
<p>What you will owe is the loan amount. So if you borrow $15k and they charge you $300 in fees they will actually give you the loan amount less the fees ($14,700) but you will owe the loan amount of $15,000.</p>
<p>For subsidized loans the interest does not start accumulating until the end of the grace period. You can pay the loan off at any time before this with no interest or penalties. (your online counseling will contain this information - print it off and keep it filed with your school related papers). For unsub the interest starts the day the money is disbursed to you.</p>
<p>Yes you can accept the loan from the school and not pursue applying for it if you find another source of funding.</p>
<p>I don’t know of all the banks that don’t charge fees. My son’s loans are through Banc 1st I think (may be a local State bank). I have read that disclover student loans do not charge fees.</p>