pay unsubsidized interest while I am in school?

[chelu55]

Alright, Im a bit confused with all this financial aid hoopla. While I was filling out my MPN for Citibank there was a "Check box" for me to pay unsubsidized interest while I was in school (which was already checked off). My first thought was no way! But, does anyone know if there is any penatly or benefit on when to pay it. I really dont plan on working all that much. I much rather spend my money on Ramin Noodles then interest on my financial aid. Any suggestions?

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[tharper14]

Alright, Im a bit confused with all this financial aid hoopla. While I was filling out my MPN for Citibank there was a "Check box" for me to pay unsubsidized interest while I was in school (which was already checked off). My first thought was no way! But, does anyone know if there is any penatly or benefit on when to pay it. I really dont plan on working all that much. I much rather spend my money on Ramin Noodles then interest on my financial aid. Any suggestions?

Yeah I'm a little confused too. I've never had to take finanical aid before so it's a little confusing. Subsidized means that you'll start accumulating interest from the day you get the loan right? Unsubsideized means you accululate interest 6 months after you finish your degree right? What if you decide not to use finanial aid and just pay for it? Can you still apply for financial aid the next year if you need it?

 

[fenil2005]

Yeah I'm a little confused too. I've never had to take finanical aid before so it's a little confusing. Subsidized means that you'll start accumulating interest from the day you get the loan right? Unsubsideized means you accululate interest 6 months after you finish your degree right? What if you decide not to use finanial aid and just pay for it? Can you still apply for financial aid the next year if you need it?

NO...
subsidized= No interest
unsubsidized= interest

 

[smartypants723]

What if you decide not to use finanial aid and just pay for it? Can you still apply for financial aid the next year if you need it?

You can deny the financial aid if you decide to pay for it yourself. You do have the option of accepting partial amount of the loans and pay for the rest of what you have to pay.

You can apply for financial aid next year. It is required to apply for financial aid every year in order to receive aid each year.

 

[IrishRxMan]

I would avoid paying the interest while in school. It will only amount to a few hundred per year at this point. Besides, what would you be paying it with, the money you took out in the first place?

 

[vegasbaby]

I completely agree with IrishRXMan. Worry about the interest later. If you have expendable income or money left at the end of the loan period, just take a smaller loan next year!

By the way, even though it has already been noted: unsubsidized just means that interest begins to accrue on your loan immediately. You have the option of paying it off during the loan period, otherwise it is added to your capital. A subsidized loan means that Uncle Sam takes care of the interest for you while you're enrolled full-time.

 

[esrodems]

I disagree with everyone else. Unsubsidized loans means that you are charged interest on them while subsidized means that the govt pays the interest while you are in school. Now if you choose to defer the interest on the unsubsidized loans while you're in school say four years then each year your interest is going to get rolled over and capitalized ito your loan so in effect what will be happening is that you will be paying interest on your interest. Personally I think that if you can pay it while in school then you should do it and besides if at some pt you can't afford it then you can always decide to defer the interest..it says this on the bill when you have to pay it every quarter...that's just my 2 cents

 

[beancow]

Yup, I'll be paying my unsubsidized interest while I'm in school.... I haven't done the calculations, but the compounded interest doesn't sound too appealing.

 

[fenil2005]

I disagree with everyone else. Unsubsidized loans means that you are charged interest on them while subsidized means that the govt pays the interest while you are in school. Now if you choose to defer the interest on the unsubsidized loans while you're in school say four years then each year your interest is going to get rolled over and capitalized ito your loan so in effect what will be happening is that you will be paying interest on your interest. Personally I think that if you can pay it while in school then you should do it and besides if at some pt you can't afford it then you can always decide to defer the interest..it says this on the bill when you have to pay it every quarter...that's just my 2 cents

read before you post anything becuase you agree with me....

 

[esrodems]

Perhaps if you would construct your thoughts using the proper conventions of the English language then I would have understood what you were saying.



Quote:
Originally Posted by esrodems
I disagree with everyone else. Unsubsidized loans means that you are charged interest on them while subsidized means that the govt pays the interest while you are in school. Now if you choose to defer the interest on the unsubsidized loans while you're in school say four years then each year your interest is going to get rolled over and capitalized ito your loan so in effect what will be happening is that you will be paying interest on your interest. Personally I think that if you can pay it while in school then you should do it and besides if at some pt you can't afford it then you can always decide to defer the interest..it says this on the bill when you have to pay it every quarter...that's just my 2 cents

read before you post anything becuase you agree with me....

 

[fenil2005]

Perhaps if you would construct your thoughts using the proper conventions of the English language then I would have understood what you were saying.



Quote:
Originally Posted by esrodems
I disagree with everyone else. Unsubsidized loans means that you are charged interest on them while subsidized means that the govt pays the interest while you are in school. Now if you choose to defer the interest on the unsubsidized loans while you're in school say four years then each year your interest is going to get rolled over and capitalized ito your loan so in effect what will be happening is that you will be paying interest on your interest. Personally I think that if you can pay it while in school then you should do it and besides if at some pt you can't afford it then you can always decide to defer the interest..it says this on the bill when you have to pay it every quarter...that's just my 2 cents

Even a dee dee dee person can understand what i said in my earlier post. I hope you have taken any form of math course in college as you had hard time understanding a equal sign.Here is a dummy version for you

Subsidized loans have no interest while you are in college finishing your PharmD.

Unsubsidized loans on the other hand is loan with interest and you pay the interest since day 1.

 

[beancow]

Fenil: you said Subsidized = no interest, Unsubsidized = Interest... which is correct to a certain extent, but very vague.

Esordems said exactly what you said, but in a more accurate and detailed manner.

Subsidized loans DO have interest, but the Gov't (I think the US Board of Education) will be subsidizing the payment on the interest while you're in school. Thus, interest won't be accruing until you're out of school.

On the other hand, UNsubsidized loans have interest accruing after the first loan has been disbursed. Because the gov't won't be paying for the interest while you're in school, the interest will add onto your loan, and you'll be paying more interest on your interest (compounded interest). Because the compounded interest can really add up, a lot of students might opt to pay the interest while their in school.

 

[PArTyKikI]

Does anyone know what the interest rate would be? Will it be fixed or variable?

 

[IrishRxMan]

Does anyone know what the interest rate would be? Will it be fixed or variable?

The interest on all stafford loans is variable until you graduate and consolidate, hopefully for a fixed percentage rate. If you're already in school, why use your money you took out to pay the interest? That's like using your student loan money to pay for your credit cards. You're taking money out to pay for interest on money already spent. How much sense does that make? If you have a job and can pay the interest, that's another thing. But, it's each individual's choice what they do with their money and as they say, a fool and their money are soon parted. Each person's situation is different and for one to tell what is best for someone else is very presumptuous. All one can do is give their advice and let the other party decide to take it or not.

 

[Aggie07]

I am not paying the interest now because there's no way I could afford to do so.

 

[fenil2005]

Fenil: you said Subsidized = no interest, Unsubsidized = Interest... which is correct to a certain extent, but very vague.

Esordems said exactly what you said, but in a more accurate and detailed manner.

Subsidized loans DO have interest, but the Gov't (I think the US Board of Education) will be subsidizing the payment on the interest while you're in school. Thus, interest won't be accruing until you're out of school.

On the other hand, UNsubsidized loans have interest accruing after the first loan has been disbursed. Because the gov't won't be paying for the interest while you're in school, the interest will add onto your loan, and you'll be paying more interest on your interest (compounded interest). Because the compounded interest can really add up, a lot of students might opt to pay the interest while their in school.

i know beancow that she said in detail about the subsidized and unsubsidized loans but if you read her first sentence it says "i disagree with everyone else" so i assume that i am included as well as i had already posted about loans before she did..the point is that people should be careful about what they type..thats all..

 

[esrodems]

I think the question at hand was whether or not to pay the interest on unsubsidized loans while in pharmacy school since you did not address this question in your post and instead just vaguely said what unsubsidized vs subsidized loans were then my response was clearly not directed towards you.
PS I'm a woman perhaps that's why I CAN communicate clearly.

 

[genesis09]

The interest on all stafford loans is variable until you graduate and consolidate, hopefully for a fixed percentage rate. If you're already in school, why use your money you took out to pay the interest? That's like using your student loan money to pay for your credit cards. You're taking money out to pay for interest on money already spent. How much sense does that make? If you have a job and can pay the interest, that's another thing. But, it's each individual's choice what they do with their money and as they say, a fool and their money are soon parted. Each person's situation is different and for one to tell what is best for someone else is very presumptuous. All one can do is give their advice and let the other party decide to take it or not.

Interest on new stafford loans haven't been variable since 2006. All Stafford loans have a fixed interest rate of 6.8%.

 

[llgordon]

Does anyone know how that 6.8% is compounded? Monthly?

 

[fenil2005]

I think the question at hand was whether or not to pay the interest on unsubsidized loans while in pharmacy school since you did not address this question in your post and instead just vaguely said what unsubsidized vs subsidized loans were then my response was clearly not directed towards you.
PS I'm a woman perhaps that's why I CAN communicate clearly.

sorry, if i sounded little rude but i think it was miscommunication at both ends..

 

[esrodems]

Apology accepted now let's forget about it I think the point of this forum is to help people who have legitimate questions not to quarrel with one another.

 

[IrishRxMan]

Interest on new stafford loans haven't been variable since 2006. All Stafford loans have a fixed interest rate of 6.8%.

D'oh! I apologize for posting some wrong info. I was not aware they had fixed the interest rate. I guess I just didn't care about what interest was being charged until after I graduated and tried to get a low rate for consolidation. Argh, I've been in school too long!

 

[PArTyKikI]

Interest on new stafford loans haven't been variable since 2006. All Stafford loans have a fixed interest rate of 6.8%.

A interest rate of 6.8%? That's high......

 

[genesis09]

A interest rate of 6.8%? That's high......

Historically speaking, that is not a high interest rate. We've just been going through a period of low interest rates.

 

[pezdispenser]

The interest on an unsubsidized loan accumulates and is not added to your loan balance until you start repaying it. Therefore, interest is not compounded on that interest during school.

For example, for unsubsidized loans of $10k per semester x 8 semesters @ 6.8%, the accumulated interest at the end of school will be around $12k, which is then added to your balance when you enter repayment. The $12k was essentially interest free while you were in school.

Of course, after you enter repayment, you now have an additional $12k to pay off, and you are now being charged interest on it.

 

[TrojanMikeD]

Does anyone know if the the Stafford Loan rate is expected to drop after July 1, 2008? I know that they adjust the rate every year on July 1st, and due to the recent cuts by the Fed this year, it would make sense that the Stafford Loan rate would also decrease. In this case, is it better to wait to guarantee your loan after July 1st? Thanks!

 

[IrishRxMan]

Does anyone know if the the Stafford Loan rate is expected to drop after July 1, 2008? I know that they adjust the rate every year on July 1st, and due to the recent cuts by the Fed this year, it would make sense that the Stafford Loan rate would also decrease. In this case, is it better to wait to guarantee your loan after July 1st? Thanks!

That would make sense, but this is the government we're talking about here. Anyone that has ever worked for Uncle Sam knows that business isn't conducted in the government the same as in normal society. I truly hope the interest drops. If memory serves, one of the interest rate drops was specifically for education loans.

 

[pezdispenser]

Unconsolidated Staffords disbursed from 7/1998-6/2006 are variable rate set on 7/1 each year. The rate this 7/1/08 will probably be 3.61% for in-school/grace and 4.21% in repayment.

Staffords disbursed from 7/2006 are fixed rate, 6.8% in most cases.