sanerdudette

Now is the time when college acceptances are handed out and financial aid award letters soon follow.

In order to bear the high tuition costs, the aid often comes from a patchwork of different sources. After analyzing your award letter, you should come away knowing three things:

1. Amount of grant or scholarship awarded - This is the amount of money granted by the university to the student. It is free and clear and does not need to be paid back as long as the student remains in good standing.

2. Amount of loan eligibility- There are two types of loans:
Subsidized Loans - are awarded on the basis of financial need.
You won’t be charged any interest until you begin paying off
the loan because the federal government subsidizes (i.e. pays) the
interest during this time. The interest rate on subsidized loans
is 5.6%
Unsubsidized Loans - You will have to pay interest while you are
in school. The interest rate unsubsidized loans is 6.8%. The
principal on these Stafford loans becomes payable six months after
college graduation.

3. Amount you are responsible for paying - This is the bottom line number of how much you are expected to pay (less any amounts earned from a work study progam) You may be able to borrow some or all of this amount.

Remember also, that you are not obligated to accept any loans that are offered.

Feel free to post any additional questions.