<p>So I am being offered $3500 in subsidized loans and I am considering on taking them.
The things I am wondering are that when I choose a repayment plan, can I pay more than what was initially decided when I am billed? So say if the monthly due was $100, can I pay more than that? And if I take out a subsidized loan each of my 4 years for varying amounts, how will repayment work after I graduate and the grace period? So if I took out $3500 the first year, $2500 the second, $2000 the third, and $2000 the fourth, and it has been one month after the grace period, and I were to fully pay back the loan amount, then would I be paying back 10,560 at the interest rate of 5.6%? Unless the interest rate is an annual one and not a monthly one then it would be 10,560 after one year instead of one month</p>
<p>Also, I’m confused as to what this means as part of the Stafford loan.
From what I can understand, it means that I have to pay a $350 fee if I take out a $3500 loan and a rebate of $175 will be included in every disbursement period?</p>
<p>The guarantee and origination fee will be deducted from the loan amount you borrow. You will be charged a 1.0% origination fee. A rebate of 0.5% of the loan amount will be included in each disbursement.</p>
<p>1% of $3500 is $35, not $350. </p>
<p>The origination fee is deducted at source before the loan is disbursed to you. If the origination fee is 1% then the fee is $35 so the actual amount you will get is $3,465 ($3500-$35). Sometimes they will rebate part of the origination fee to you. It sounds like they are only going to charge half the origination fee, so 0.5% or $17.50 instead of $35. Or maybe they are rebating the entire origination fee. The wording is a bit confusing. But any way the fee is not $350 so not something to worry about too much.</p>
<p>The interest rate on the loan is an annual interest rate, not a monthly rate. The rate for subsidized loans disbursed this year is 4.5%. Where did you get the 5.6% rate? That was the rate for last years loans, not this years (the rates are fixed by the govt). Rates for loans disbursed next school year (2011-2012) will be 3.4%. Currently rates for loans disbursed the 2012-2013 school year are scheduled to be 6.8% (same as for unsub loans). Hopefully this will change, but who knows.</p>
<p>If you pay the loans back in full before the grace period is up then you will pay no interest, only the loan amount. The govt pays the interest on subsidized loans until you graduate (or drop below half time) plus the 6 months grace period. If you do not pay the loan back before the grace period is up (which most people can not) then you begin to be responsible for the interest and minimum monthly repayments begin.</p>
<p>Finaid has some good information about student loans
[FinAid</a> | Loans | Student Loans](<a href=“Your Guide for College Financial Aid - Finaid”>Student Loans - Finaid)</p>
<p>You can always pay more than you are required to pay, and there is no penalty for doing so.</p>
<p>As far as the loan fees … I tell students that you can figure out how much you will actually receive from your Stafford by multiplying the amount by 0.995. If you are trying to cover a balance & want to figure out how much to request, you take the amount you want to receive & divide it by 0.995. You owe the entire amount of the loan, but because the fees are deducted before the money is disbursed to your account, you receive 99.5% of the amount you borrowed.</p>