<p>Im an incoming freshman at University of California Santa Cruz and a first time borrower. I got a Federal direct unsubsidized loan to pay for some of my dorm. I just need to know:</p>
<p>Do I need to pay interest on this loan while I am in school (full time student)?</p>
<p>When do I need to start making payments? After I graduate? At the end of the school year?</p>
<p>Thanks in advance to anyone who takes the time to answer!</p>
<p>You can defer the interest until the loan goes into repayment. However the interest will be capitalized - meaning it will be added to the loan and you will incur interest on the interest.</p>
<p>The loan will go into repayment 6 months after you graduate or drop below half time enrollment. </p>
<p>All this is explained in detail when you do the MPN and online counseling that is required to take the loan out. It is a good idea to print it out for future reference.</p>
<p>Also, please note that the interest rate for unsub Direct loans is 6.8%, NOT 3.4% that is on the news.</p>
<p>Please go to this link and READ IT: [Subsidized</a> and Unsubsidized Loans | Federal Student Aid](<a href=“http://studentaid.ed.gov/types/loans/subsidized-unsubsidized]Subsidized”>http://studentaid.ed.gov/types/loans/subsidized-unsubsidized). Did you do your entrance counseling yet? The entrance counseling explains this, as well.</p>
<p>I am glad you asked … it is so very important for every student who borrows to understand what he/she is doing.</p>