any penalties for early repayment?

[A.D.O.R.]

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thanks a lot to the folks who replied.

 

[Vincristine]

You have 120 days from dispersement return unwanted loan money wihtout pentalty (i.e. they subtract it from your original principal and credit any origination fees). Since it's most likely that you got your money more than 120 days ago, your best bet is to return next year's money, or reduce that amount taken (if it's not too late to just change your award for next year). Turning down aid money will NOT affect your award for next year.
The subsidized perkins loan cap is $8500/2 semesters. However, this number is also affected by your EFC. If you recieved unsubsidized loans, you surpassed the maximum amount of subsidized loans that were available to you for that year. Hence, you can not turn unsub loans into sub loans magaically. If none of the above options work for you, you can by all means write direct loans a check with your abundant wealth. You will not be charged a penalty fee, however the origination fee will not be deducted either. It will just be like you made an early payment on your loans.
However, I'd give serious thought before returning the extra money especially because of today's interest rates. The unsub deferral rate is something rediculous like 3%. I'm going to guess that you're an M1. It's not a bad idea to have some extra money in the next couple of years escpecially if you need to finance clinic-appropriate dress, a car, a new computer, away rotations, traveling to interviews, relocating, etc. As low as the interest rates are, in mot cases it's certianly worth holding onto a couple extra grand (even $10k) before you have a better idea of what your living expenses will be like for M3, M4. Unsub Perkins loan money is certainly at a much better rate than relocation loans available at the end of M4.

 

[mpp]

No there is no pre-payment penalty for federal loans and it should have no effect on next year's loans. Don't know the answer to the question about Perkin's loans...ask the financial aid office.

 

[Vincristine]

keraven: So can I renegotiate my award for next year to first max out subsidized loans and then use unsubsidized for remaining financial need? Thanks for the help.

The point is that this IS how financial aid is awarded. subsidized loans are awarded first, but when you reach that max, the rest is made up with unsubsidized loans. Get it?

 

[Vincristine]

well, i get what you're saying but my school did not max out my subsidized loan money before giving me unsub. money. i guess they don't get it.

Nope, then your EFC was high enough to make you inelidgable for the full $8500/2 semesters. So in your case, whatever they did award you was YOUR max and you won't be eable to exceed that. Unless for some reason you filled really late or after the fact, then you may have missed out on funds you would otherwise be elidgable for.

 

[Vincristine]

To whomever thought I was unnecessarily hositle, you completely misinterperted things. Given the three paragraphs of information, I don't see how I was anything but helpful. Geesh, this karma stuff is already rediculous.

 

[Super Rob]

Turning down aid money will NOT affect your award for next year.

I think I missed the original question, but this line caught my attention.

If you turned down aid money, wouldn't the school assume you were capable of coming up with the same money next year and provide you with less aid than before?

 

[mpp]

Eligibility for need-based aid is based on your EFC, not how much aid you took last year.

 

[Super Rob]

Eligibility for need-based aid is based on your EFC, not how much aid you took last year.

thanks for the response