<p>OK, finished the FAFSA and it said this:
You may be eligible for the following:Direct Stafford Loan Estimate - $5,500.00</p>
<p>Does that mean subsidized or unsubsidized.<br>
When/how do I find out if we can actually get this?<br>
And the details of the money disbursement? Here to the house? Or directly to the college?
Can you use it for anything you want? (ie, room and board as opposed to tuition)
Can you make payments while the child is in college?
I understand the loan is for my daughter, not the parent but I would have her take it in her name to help fund college and I would pay it but would NOT want to wait 4 years, would want to make payments while she's in school. Can you do that?</p>
<p>The Stafford must be taken by the student. Parents can apply for the Plus loan. Staffords do not require payments until 6 months after the student graduates or drops below half-time attendance. You can make payments at any time.</p>
<p>Subs vs. unsub wil be determined by the school as it’s based on her calculated need. That info will be in the FA award letter she receives from the school. The loan is made through the school, who will first deduct direct-billed charges that are outstanding. She will apply for it shortly before the semester starts and she will have to do mandatory loan counseling and esign the MPN. The student can request a refund of the unused proceeds. Federal loans can be used for any educational expense, including room, board, books, transportation, etc.</p>
<p>All freshman are eligible for $5500 in Stafford loans. So FAFSA telling you this does not mean anything. The $5500 can be a combination of sub and unsub depending on what your need is (which is determined by the school). If there is no “need”, as determined by the school, then the entire loan would be unsub. If there is need, then up to $3500 of the $5500 can be subsidized (depending on the amount of need). </p>
<p>Yes, Stafford loans are in the student’s name only. For subsidized loans the govt pays the interest until the student graduates or drops below 1/2 time enrollment plus a 6 month grace period. For unsub loans the student is responsible for the interest from day one. The interest can be paid as you go or deferred until the loan goes into payment. There is no penalty for paying the loan off early.</p>