<p>We just looked up our son's current loans in NSLDS and we were surprised to see that for his unsubsidized Stafford loans, the loan date is in late summer and includes the entire amount loaned for the academic year, even though half of the loan was disbursed to his school bursar account in January. Is this the normal way to handle these loans? It means he is paying and accruing compound interest for half the money before he ever gets it!</p>
<p>You are looking at the date the loan was originated. This is not the same as the date the loan was disbursed. Click on the number in the blue box to the left of the loan. You will see the dates of disbursement for the two payments.</p>
<p>Ah, I see, thanks.</p>
<p>It looks like the accrued interest is simple interest (rather than compound) – is that correct?</p>
<p>Here you go (from the studentaid.ed.gov website):
The amount of interest that accrues (accumulates) on your loan from month to month is determined by a simple daily interest formula. This formula consists of multiplying your loan balance by the number of days since the last payment times the interest rate factor.
Simple daily interest formula:
Number of days since last payment
x outstanding principal balance
x interest rate factor
= interest amount
The interest rate factor is used to calculate the amount of interest that accrues on your loan. It is determined by dividing your loan’s interest rate by the number of days in the year.</p>
<p>Thanks. That’s good news (though kind of surprising) – I thought the interest was also compounding so it’s nice that it’s not.</p>
<p>I just checked my son’s loans at ‘Fed Loan Servicing’ and the disbursement date shows 08/26/12 for the whole loan amount. Have they been accruing interest since then though half the loan was disbursed only in Jan 2013? No idea. Luckily he only has $1000 of unsub loan left to be paid.</p>
<p>Arutha, did you click the square box with a number into it next to the loan. Hopefully when you click that and go to the detail page for the loan you will see that it originated on one date but was disbursed on 2 dates. When I hand-computed the interest for my son’s loans it looks like each half only started (correctly) accruing interest when it was disbursed.</p>
<p>yes, I was looking at the details info as kelsmom suggested and it is the ‘disbursement date’. There are no separate entries for each disbursement.</p>
<p>I would definitely call or email his school’s finaid office to ask about that.</p>
<p>Look in NSLDS, because it is broken down by loan period on that website. It might not be on Fed Loan’s site. If you are unsure, call Fed Loan - they are a good servicer, and their customer service rep should be able to answer that. Loans must be split into two equal payments, unless it’s the final half of the award year (or the student is graduating at the end of the term making it a one-semester loan). I am betting it’s really split into two payments, it just isn’t obvious on their website. But do check.</p>