<p>My daughter will be a sophomore and we just received her financial aid letter. Last year, everything received was in grants and scholarships. This year lists an unsub. stafford loan. Exactly what is it and would it be a good idea to accept? The loan amount is $987 and thus far, she has no loans for college. With the economy the way it is, she's not going to make as much over summer as anticipated. How do we go about looking into the proper lenders?</p>
<p>Thanks in advance!</p>
<p>It is a loan for (I think) 6.8% interest that starts accruing the day they pay the school. She can pay the interest starting then or just let it add up and start paying after she graduates.</p>
<p>The college can give you some names of lenders or search the internet for Stafford Loans. Be careful, some lenders add fees to these loans. And make sure early payoff is allowed.</p>
<p>My guess is that your need was met 100% with the addition of the unsub. loan this year. That's why it was offered to you. The truth is, she can borrow up to $3500 if she wants (she can borrow under unsub. Stafford program to replace EFC). There is no reason to accept the loan if you don't need it! The interest does begin accruing when the funds are disbursed, so if you don't pay it off regularly (we pay our D's quarterly), it will be added to the loan amount when repayment starts (6 months after graduation, or later under certain conditions). My advice is this: If you will <em>need</em> to borrow money, unsub. Stafford is a great bet. If you don't need to borrow ... don't!</p>
<p>Wachovia seems to have reasonable terms. The FinAid site recommends Citi for federal student loans.</p>