<p>Hi O knowledgeable CC folk:</p>
<p>S has been offered both types of Stafford loans, sub and unsub.</p>
<p>I'm having trouble figuring out the interest rate for each one for loans beginning in 2012.</p>
<p>I found different sites and am getting different numbers. Some sources say fixed, some say variable, some say 3--%, some say 6--%.</p>
<p>And is there some pending legislation that may change it, I feel like I read that somewhere at some point?</p>
<p>What's the deal this year? </p>
<p>Thanks :)</p>
<p>For 2011-2012 (this academic year): 3.4% fixed for sub and 6.8% fixed for unsub.
For 2012-2013 (next academic year): 6.8% fixed for both sub and unsub.</p>
<p>Nothing is set beyond next academic year and it is set by Congress. They could change the rate for next academic year and beyond when they get around to it but nothing is for sure at this point including the continuation of the program itself.</p>
<p>ttp is exactly right.</p>
<p>5 or 6 years ago the subsidized loan interest rate was set up to decrease a little every year from 6.8 to 6 to 5.6 to 4.5 to 3.4 this current school year. if no legislation is passed, the rate reverts back to 6.8%. </p>
<p>As for whether they will pass legislation to reduce the 6.8% rate, based on every other piece of legislation related to educational financial aid over the past year or so, I wouldn’t hold my breath.</p>
<p>Thanks. So assuming nothing is done by congress (imagine that!), the only difference between the two is that one accrues interest from day 1 and the other doesn’t until school stops?</p>
<p>Yes, that is right (assuming they do nothing). It used to be that the sub loan interest did not start until 6 months after a student graduated or dropped below half time. I think that has also changed starting with loans issued after July 2012. There was certainly talk about it, but i am not entirely sure if it passed. I think it was at the same time as sub loans for grad students were completely done away with.</p>
<p>swimcatsmom, this is all new to me (I’m a parent of a hs senior).
My dd will be taking out a stafford load as well as a private loan in her name which dh and I are paying back.</p>
<p>Anyway, she applied ED, received the tuition exchange scholarship and we have sent money to her LAC for her seat.</p>
<p>They sent us a letter informing us how much the school is (approximately) and how much she will be getting but I’m thinking we would get an actual breakdown (like a spreadsheet) of exact amounts such as school cost, books, dorms, etc with the deduction of what we are getting, showing what will be exactly owed for 2012. Does this happen after all RD are notified and after May 1? Maybe I should call the school LOL? </p>
<p>My question is, when do we actually apply for the loan? Now, May, July? Is there a reason to do it sooner rather than later?</p>
<p>Thank you (and anyone else that can help) very much. I greatly appreciate it.</p>
<p>My d is a freshman and applied rd last year. As I remember, she got her fin aid package letter a day or two after the acceptance. In that letter was a listing of true costs-tuition, fees, r& board and estimated books & misc. (which can vary so much that I never counted their numbers) with her fin aid numbers. No spreadsheet, just a list. It probably varies from school to school how this info is disseminated. D’s pkg included a sub fed loan. When we accepted the whole thing with the loan, it was automatically arranged through the college. I’m sorry I can’t comment on the private loan situation. Call the school; they are pros at this stuff.</p>
<p>
That is correct. Direct Subsidized loans will not be eligible for an interest subsidy during the six-month grace period. See below:</p>
<pre><code>Subsidized loans are loans for which the borrower is not responsible for the interest while the student is enrolled in college on at least a half-time basis, when the loan is in the six-month grace period after the student is no longer enrolled at least half time, or if the loan is in a deferment status. This provision eliminates the interest subsidy provided during the six-month grace period for subsidized loans for which the first disbursement is made on or after July 1, 2012, and before July 1, 2014. If you receive a subsidized loan during this timeframe, you will be responsible for the interest that accrues while your loan is in the grace period. You do not have to make payments during the grace period (unless you choose to) but the interest will be added (capitalized) to the principal amount of your loan when the grace period ends. This provision does not eliminate the interest subsidy while the borrower is in school or during eligible periods of deferment.
</code></pre>
<p>lovestotravel - since the Stafford loans all became direct loans a couple of years back, all we have had to do is accept the loan, fill out some online paperwork (Entrance Counseling and Master Promissory Notes (MPNs)) and then everything was automatic. </p>
<p>Prior to that some schools had direct loans and others did not - the ones that did not required you to find a lender and go through an application process.</p>