How does the stafford unsubsized plan work

Paying for College
1

<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>

2

<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>

3

<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>

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>