I know that the loans come due sometime after graduation, 9 months comes to mind. What happens with the loans if the student goes onto graduate or professional school? Do they need to pay them while in graduate school, will they be deferred until they graduate from their grad school or is there another process. Concerning subsidized loans. If the loans are deferred does the interest begin accruing upon graduation from their undergrad school or when they finally finish their degree? Thanks
https://studentaid.ed.gov/sa/repay-loans/understand
Here is some information
Thank you. Is it unlawful or perhaps merely unethical to take the federal subsidized loan and hold it for professional school? The interest rate is lower than Direct Plus loans for graduate students.
No, I think it is a smart strategy. If you qualify for subsidized loan you can take it, you are not required to spend the money as far as I know.
I also wondered about taking loans now at undergraduate level to be used for grad school. Do the loan proceeds go directly to the student or directly to the school and automatically credit the bursar account?
To the school. If there is an over payment, you’ll receive a refund according to the policy of the school. Often it is after the drop/add date . I think my daughter’s took about 5 weeks this spring.