Subsidized vs. Non subsidized stafford loan

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Discus: Financial Aid and Scholarships: May 2004 - Archive: Subsidized vs. Non subsidized stafford loan
By Angstridden (Angstridden) on Wednesday, June 23, 2004 - 04:29 pm: Edit

I am really curious how the school decides which type of loan you qualify for. A friend of the families has a good income yet qualified for the Subsidized loan whereas another buddy with about similar got the unsubsidized one? so how do they decide?

By Ksmom (Ksmom) on Wednesday, June 23, 2004 - 04:53 pm: Edit

Subsidized loans are need based whereas unsubsidized Stafford loans are available to all students. It all depends on the EFC and the cost of attendance determined by the school.

By Ndbisme5 (Ndbisme5) on Wednesday, June 23, 2004 - 07:11 pm: Edit

Interest rates I think are lower for the subby ones.

By Ksmom (Ksmom) on Wednesday, June 23, 2004 - 07:40 pm: Edit

Don't think there is a difference in interest rate. The government pays the interest for the subsidized while student is in school but the rate is the same as the unsubsidized.

By Garland (Garland) on Thursday, June 24, 2004 - 09:29 am: Edit

These are federal loans following federal methodology, so even though you may think their incomes are similar, the financial picture of the first family is showing up differently on the FAFSA than that of the second family. Why? Hard to say: maybe less savings, or more than one child in school, or somehow their income does not look high for that year, are some examples. No way to know w/o seeing their FAFSA.

By Angstridden (Angstridden) on Thursday, June 24, 2004 - 12:41 pm: Edit

Thanks all! Garland, I didnt think about that. I wonder what the cut offs are for sub vs unsub..would that vary by school.

By Jenniferpa (Jenniferpa) on Thursday, June 24, 2004 - 03:11 pm: Edit

It would vary depending on how each school calculated need. Since they all seem to have a different methodogy and they all charge different rates cut offs are inevitably going to be different.

By Garland (Garland) on Thursday, June 24, 2004 - 05:28 pm: Edit

There's information here:

BAsically, if you have need according to federal methodology, you can be awarded a subsidized. If your EFC is higher than the cost of attendance, you can only get an unsubsidized.

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