Questions about subsidized loans

[medblazer21]

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Is the interest paid by the federal govt only why you are in school, or also during deferment periods (residency)?

Also, can somebody confirm that consolidating subsidized loans keeps them subsidized during deferment even if they are consolidated iwth unsubsidized loans?

 

[Doctor Bagel]

Is the interest paid by the federal govt only why you are in school, or also during deferment periods (residency)?

Also, can somebody confirm that consolidating subsidized loans keeps them subsidized during deferment even if they are consolidated iwth unsubsidized loans?

The big thing is to note the difference between deferment and forbearance. During periods of deferment, interest is still paid by the government on subsidized loans. It's not during forbearance. Right now, residents can get deferment under the 20/220 economic hardship deferment plan. This is most likely going away in 2009, forcing residents to choose between paying a reduced amount on their loans (around $350/month) or going into forbearance.