More Funds for College
Unsubsidized Loans for your University
When it's time to go to college, most of us do not even have funds for year one. We need funding. What kind of funding is available? Are there any special incentives for your financial situation?
You can get funds from the federal government, which is the first place in which to apply, as well as private banks and other organizations. All private loans can be considered unsubsidized because all subsidized student loans have the benefit of the government paying the interest for the life of the loan
Many people get confused between unsubsidized and subsidized loans. Subsidized Loans are only for those who really need financial assistance. Since all private loans from banks will not pay your interest for you, the distinction between subsidized and unsubsidized is in regards exclusively to federally funded student loans.
Unsubsidized Federal Student Aid
The most popular student loans are Stafford and Perkins Loans. The Stafford Loans can be unsubsidized or subsidized. Perkins Loans are not ever subsidized since they are need-based and have a fixed interest rate of 5%. There is no origination fee with the Perkins Loan.
Stafford Loans do have some fees when you first get the loan, however there is no application fee with the FAFSA form. A student may borrow directly from the U.S. Department of Education, which is called a Direct Loan. Another choice is to use another lender to take out a federal student loan. These financial institutions can distribute federal funding and act as the repayment center.
Federal Family Education Loans are the ones used by the banks and other sources. The only real difference between an FFEL loan and a Direct Loan is where the check is sent. There are of course unique benefits with each lender, but the fact is that they are all federal student loans.
Student Loan Consolidation Programs
The interest rates of unsubsidized loans either vary over time or are fixed. Since July 1, 2006, Stafford loans have fixed rates instead of variable rates. Once you consolidate, you can lock in with one rate which is hopefully lower than the rate you first received. Of course if your loan was subsidized, interest rates would not matter to you since you don't pay it.
