Can anyone explain the difference between the two loans and why it was split into two loans?
We were granted
Fed Direct Subsidized Loan - 695.00
Fed Direct Unsubsidized Loan- 4,805.00
any benefits to taking just the direct subsidized loan? is the split need based?
There is a maximum amount that can be subsidized based on your need (usually $2000 as the max). The subsidized part means the loan does NOT accumulate interest while you are in school. The Non-subsidized starts accumulating interest when it is loaned. For My D’s unsub loan I paid the interest each semester while she was in school so it wouldn’t compound.
another related question: college B offered only unsubsidized; (more scholarships and less out-of-pocket total there).
why does one college A offer subsidized and college B doesnt? do colleges decide this, or is it a federal decision?
(we think we know her choice regardless of this all; but with 2 more kids coming up its good to understand how these things work.) thank you
The subsidized amount has a max of $3500 but the split is determined by the individual school. They have their own methodology for calculating how they package it up, so you have to look at the entire picture for each school.
Good correction on the Max Sub loan. I twisted them around.
https://studentaid.ed.gov/sa/types/loans/subsidized-unsubsidized
It probably depends on COA and your EFC. At one school after applying other aid they determined you have unmet need and put in the subsidized loan, at the other school they did not.
The school doesn’t decide how much to make subsidized, it is based on COA-all grants and scholarships. If that number is higher than your EFC, it is subsidized (up to $3500 for freshman). If that number is less than EFC, it will be unsubsidized (and $2000 of the max $5500 is always unsubsidized).
Thanks twoinanddone, I thought that was the way sub/unsub was determined.