How does the stafford unsubsized plan work

[Cytotoxictcell]

<p>Ok i just go my first unsubsidized loan. How does the interest add up? I think its 6% interest. I got $1000 unsubsidized. </p>

<p>I know how to add interest but how often does the interest add up every year? </p>

<p>1000 * 6% = $60</p>

[KKmama]

<p>Interest is compounded annually. So this year’s loan will incur an interest of 60% of $1000, then next year it will incur interest on the balance of $1060, and so it increases. You will owe interest on the interest due, in other words. Plus all of the interest that will accumulate on loans taken out for future years.</p>

[Appaloosa]

<p>From <a href=“http://studentaid.ed.gov/PORTALSWebApp/students/english/studentloans.jsp:[/url]”>http://studentaid.ed.gov/PORTALSWebApp/students/english/studentloans.jsp:&lt;/a&gt;&lt;/p&gt;

<p>

Interest accrues (accumulates) on an unsubsidized loan from the time it’s first paid out. You can pay the interest while you are in school and during grace periods and deferment or forbearance periods, or you can allow it to accrue and be capitalized (that is, added to the principal amount of your loan). If you choose not to pay the interest as it accrues, this will increase the total amount you have to repay because you will be charged interest on a higher principal amount.

You will receive a statement every six months(or you can access the information online) of interest accrued which you can then choose to pay or not.</p>