If I receive a full tuition waiver and a small stipend, am I still able to take out a Stafford Loan? I would need it to cover the cost of moving, rent, gas, etc.
How does this work?
How does this work?
Question about graduate school loans
- Thread starter JWPoods
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Yes, you can still take out loans. However, as a graduate student you have to take out an unsubsidized loan (accrues interest from the beginning). Lame.
I have a full tuition waiver and stipend but it's still tight. I could manage without loans if I'm frugal but I decided to take out a small loan. Now I have a little extra cash for dinner with friends, movies, etc. Just trying to stay sane! My total loan should be less than $10,000 after five years which I think is manageable.
I have a full tuition waiver and stipend but it's still tight. I could manage without loans if I'm frugal but I decided to take out a small loan. Now I have a little extra cash for dinner with friends, movies, etc. Just trying to stay sane! My total loan should be less than $10,000 after five years which I think is manageable.
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Yes, you still have the ability to take out Stafford loans if you qualify. You'll need to complete a FAFSA, which will calculate your expected family contribution, and will then determine your loan eligibility (i.e., how much you can take and in what forms--subsidized and/or unsubsidized) based on the cost of attendance at your university.
If you end up not qualifying for Stafford loans (which I wouldn't see happening), you can also go the private education loan route. Just know that these loans will sometimes have higher interest rates.
Edit: Oh wait, I forgot...the new legislation eliminates subsidized loans for grad students, right?
If you end up not qualifying for Stafford loans (which I wouldn't see happening), you can also go the private education loan route. Just know that these loans will sometimes have higher interest rates.
Edit: Oh wait, I forgot...the new legislation eliminates subsidized loans for grad students, right?
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Yes, you will still have access to government loans. Just fill out a FAFSA and whatever application your university may require for financial aid. At my program, once you complete these two steps, the financial aid office automatically assumes you want to take out the max amount of loans. So, they send a letter out over the summer detailing this. Then, you have to decline any portion of the loan that you do not wish to take out and return that info to them. The disbursement happens in the fall. This is how my undergrad institution worked as well, so I assume it's fairly standard.
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Yeah, now the full loan is unsubsidized.
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Yep, this is correct. Graduate students can only take out unsubsidized loans now. I think this went into effect in fall 2012? I just started so I'm not sure but we had plenty of older graduate students complaining about the changes this fall.
This is the same process we have at my school but you can specify when you want the disbursement. I can split the amount and receive half fall semester and half spring semester.
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I can definitely see how that'd irk people, especially those who up until recently were able to take the subsidized loans.
And my program was similar to syzergy's--once the FAFSA is completed and received, the school informed me of up to what amount I was allowed to take. I then indicated how much I actually wanted, and this was split equally across fall/spring/summer.
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Also keep in mind the interest rate now has a floor of 6.8%. Used to be a better deal. I have a bunch of loans I'm paying off from way back when, but my rate is 1.625%.
Even with a lower principal, a minimum rate of 6.8% still means your balance will tend to grow quickly, the moment you start taking out the money (e.g., unsubsidized), so caution is the watchword.
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Just a quick note on the above wording to avoid confusion--the payments aren't necessarily due immediately (i.e., you remain in deferment while enrolled at least half-time), but the loans do begin accruing capitalized interest as soon as they're disbursed. Which, I would agree, is definitely something to keep in mind when taking out loans.
You do, of course, have the option to pay interest while enrolled, though.
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Whoops, that's right. Yes, you don't have to start paying the loans right away, but unlike the subsidized loans of yesteryear that grad students had access to, your principal can get interest capitalized to the balance from the moment you take out your first loan.
Unlike students of the past (and I was one of them) one can't just ignore one's loans when one is in school and just assume you only need to pay attention once you've graduated. Because, again, even a few grand of debt can grow fairly quickly when you're adding 6.8% interest to your principal on a regular basis, the magic of compound interest being what it is.
