Consolidating subsidized and unsubsidized loans

Students borrow Direct Subsidized Loans based on their financial need as determined by information provided by the students, and their parents if they are still dependents, on the Free Application for Federal Student Aid (FAFSA).The loan pays for tuition per credit hour and any other school-related expenses such as housing, books and materials.This application is also used to determine if you’ll receive a Perkins loan, another type of federal student loan.

The student might make one payment for these loans to the same loan servicer, but such payments can be pricey.Subsidized Stafford Loans have stricter limits than unsubsidized.For example, a first-year dependent student can take out a total of ,500 in Stafford loans. government, so if a student defaults, the government guarantees repayment to the lender.There are two types of Stafford loans — subsidized and unsubsidized — and each type has different financial-need requirements and benefits.

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