Southwestern College

Types of Student Loans

Subsidized, Unsubsidized and Grad Plus Student Loans

Subsidized and Unsubsidized Loans

Both Direct Subsidized and Unsubsidized loans are federal student loans. Direct subsidized loans are only available for undergrads. Graduate students are only eligible for unsubsidized loans. The main difference between these loans is that unsubsidized loans accrue interest as soon as you receive your loan. You do not have to pay the interest while you are in school, but if you are able to, this is another way to reduce your total debt. Interest really does add up. Right now the interest rate on unsubsidized loans disbursed after 7/1/15 and before 7/1/16 is 5.84%.  The origination fee is 1.68% of the loan amount. A student who has started their second year of their master’s program and has borrowed the maximum amount available for the federal direct unsubsidized loans, is currently accruing $3.70 in interest daily. https://studentaid.ed.gov/types/loans/subsidized-unsubsidized

 

Grad Plus

Grad Plus loans are federal loans available to grad student or their parents. To be eligible for a grad plus loan, one must have good credit. These loans have a higher interest rate at 6.84% and a higher origination fee of 4.292% of the loan amount. https://studentaid.ed.gov/types/loans/plus

Helpful Websites and Contacts

There are many websites which provide beneficial financial education for students. Be cautious though, because there are also a number of websites that claim to be able to help reduce a students debt for a small fee, these websites are typically a scam. There is no application fee to consolidate your federal education loans into a Direct Consolidation Loan. If you are contacted by someone offering to consolidate your loans for a fee, you are not dealing with one of the U.S. Department of Education’s (ED’s) consolidation services.  If you are uncertain about the legitimacy of a website, do a thorough investigation before using the site. You can google search reviews for the site, you can also see if the organization is a part of the Better Business Bureau, http://www.bbb.org.

These websites and contacts are recommended by Southwestern College for financial aid information:

FAFSA on the web: www.fafsa.ed.gov

PIN website  https://studentaid.ed.gov/sa/fafsa/filling-out/fsaid

MPN website: https://studentloans.gov

All Student Loan Information: www.nslds.ed.gov

Direct Loan Consolidation Information Contact: 1-800-557-7392

Direct Loan Information: 1-800-4FED-AID (1-800-433-3243)

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