<p>Because our EFC in past years did not qualify for financial need..our son must borrow at the higher unsubsidized Stafford rate. Families who financially qualify get reduced interest on their Stafford loans. Either way, Stafford is important because the private sector college loan market has dried up.<br>
I have to agree with sueinphilly. Be glad you are on child number four in this recession and that you have not already borrowed on home equity that is now nonexistent in declining home evaluations. Learn from the mistakes of others..explore Staffords and how much you are willing to let your child graduate in debt. My son at Duke has a job and will not be going directly to grad school...if he was going that route..I would have sent him to the excellent state universities we have in VA...believe me. I am currently taking a gander at the price of the path he wants to pursue in grad school in three years..and wondering how he will manage that.</p>
<p>Subsidized is much better if you can get it. With a subsidized Stafford the government pays the interest while the student is in college and for a 6 month grace period once the student is out of college or drops below half time. The interest rate is also lower, will be 5.6% for loans issued in the 2009-2010 school year, 4.5% for loans issued 2010-2011, 3.4 for 2011-2012. The unsubsidized Stafford the student is responsible for the interest from the day the loan is disbursed and the interest rate is 6.8%.</p>
<p>The subsidized loan is need based so there must be financial need for it to be awarded. The unsubsidized is not need based. Currently the maximum Stafford for a freshman is $5500 of which a maximum of $3500 may be subsidized depending on 'need'. The loan may be all unsubsidized or a mixture of unsubsidized and subsidized.</p>
<p>Swimcat, you do know more than I do, but my understanding was that if Parents do not qualfiy for PLUS loan (credit problem) child can get more unsubsidizied Staffrod.</p>
<p>Yes that's right. If the parent applies for and is turned down for a parent PLUS loan then the student qualifies for an additional $4,000 in unsubsidized Stafford loans.</p>