<p>We make way too much money for our son to be considered for any "need" based loans or scholarships (EFC 68,000 and change!), as if we have any expendable income! The "awards" are described as:</p>
<p>"Federal unsubsidized loan" (3,500/yr)
"Federal Parent loan" (19,200/yr).</p>
<p>Does anyone know what's the difference between the two and what they are?! Obviously not free money, but I don't get the difference.</p>
<p>Both loans are covered by federal regulations that set the interest rates, but neither is subsidized -- so interest will accrue from the beginning and payments also need to be made right away.</p>
<p>The Parent PLUS loan is backed by a federal lending program that guarantees that you can borrow up to the full cost of attendance -- IF you have an acceptable credit rating -- regardless of your income or other debt. </p>
<p>The $3500 loan is offered to the student - so the student is responsible for paying it back. The parent loan is the parent's responsibility -- so basically if you took that you would be about $80K in debt by the time your kid graduates. Obviously you would be ill-advised to do so -- but you can opt to take a smaller loan with the program. So, for example, if you can only afford to come up with $12K annually for your kid's education, you could pay that and borrow $7,200 -- you would have a monthly payment of around $100 on that loan. So it can be used to help you stretch to meet your EFC.</p>