<p>I need assistance in understanding the financial aid process</p>
<p>Here goes my story:</p>
<p>I was born in US. At the age of 3, my parents got divorced. I moved to India with my father and retained my US citizenship. I have done my entire schooling in India and now I am again moving back to US for higher studies along with my father who wants to make his living there.</p>
<p>I have been accepted to Georgia Tech and I need assistance in filling the financial aid form. Being a US citizen, I am eligible to file FAFSA.</p>
<p>Can you please explain me the difference between the following loans :
1. Institutional Loans
2. Federal Subsidized Stafford Student Loan
3. Federal Unsubsidized Stafford Student Loan
4. Federal Plus Loan - Parent Loan</p>
<p>My father does not want to apply for the parent loan since he has the notion that interest is too high. I dont know how true it is.</p>
<p>So , I would be grateful if anyone can explain the difference btw these loans
and advise me to apply for which loans.</p>
<p>
[quote]
The federal loan for students is called the Stafford Loan and has two variations:</p>
<pre><code>* Federal Family Education Loan Program (FFELP) loans are provided by private lenders, such as banks, credit unions and savings & loan associations. These loans are guaranteed against default by the federal government.
* Federal Direct Student Loan Program (FDSLP) loans, administered by "Direct Lending Schools", are provided by the US government directly to students and their parents.
</code></pre>
<p>All Stafford Loans are either subsidized (the government pays the interest while you're in school) or unsubsidized (you pay all the interest, although you can have the payments deferred until after graduation). To receive a subsidized Stafford Loan, you must be able to demonstrate financial need.</p>
<p>With the unsubsidized Stafford loan, you can defer the payments until after graduation by capitalizing the interest. This adds the interest payments to the loan balance, increasing the size and cost of the loan. All students, regardless of need, are eligible for the unsubsidized Stafford Loan......
Parents of dependent students can take out loans to supplement their children's aid packages. The federal Parent Loan for Undergraduate Students (PLUS) lets parents borrow money to cover any costs not already covered by the student's financial aid package, up to the full cost of attendance. Like the Stafford Loan, PLUS loans are either FFELP (provided by private lenders, such as banks) or Direct (funds provided by the government).
<p>yes, institutional loans are provided by georgia tech.......</p>
<p>but they have three types of loans under that category:
1. 7% interest rate
2. 7.5%
3. interest free</p>
<p>So, what do you advise? For which loans should I go for? </p>
<p>I can demonstrate financial need since my father lost his job two years ago and his only source of income is the interest income from his savings ~3000$p.a.</p>
<p>Note that you do not have to make a decision about what loans to take until after you learn your financial aid package from a college. Process is usually: file a FAFSA and have it sent to schools (can be done on-line), after or at the same time you are admitted, college will provide you with the financial aid package it has determined for you which could include grants, work study and loans (for those GTech institutional loans it will decide which ones to offer in your financial aid package). You then decide which parts of the aid package you will accept.</p>
<p>But pls. advise me for which loans should I apply on the georgia tech online form?</p>
<p>There are four choices as previously mentioned:
1. Institutional Loans
2. Federal Subsidized Stafford Student Loan
3. Federal Unsubsidized Stafford Student Loan
4. Federal Plus Loan - Parent Loan</p>
<p>Grants are preferable to subsidized loans
Subsidized loans are preferable to unsubsidized loans
But all govt backed loans have fairly low interest rates, look at the link.</p>