Subsidized Loans are loans for undergraduate students with financial need, as determined by your cost of attendance minus expected family contribution and other financial aid (such as grants or scholarships). Subsidized Loans do not accrue interest while you are in school at least half-time or during deferment periods. Unsubsidized
Loans are loans for both undergraduate and graduate students that are not based on financial need. Eligibility is determined by your cost of attendance minus other financial aid (such as grants or scholarships). Interest is charged during in-school, deferment, and grace periods. Unlike a subsidized loan, you are responsible for the interest from the time the unsubsidized loan is disbursed until it’s paid in full. You can choose to pay the interest or allow it to accrue (accumulate) and
be capitalized (that is, added to the principal amount of your loan). Capitalizing the interest will increase the amount you have to repay. See http://www.sfa.ufl.edu/debt-management/“Debt Management & Student Loans” for more important information on the capitalization of interest. More information regarding student loans, program requirements, and managing repayment can be found at https://studentaid.govStudentAid.gov. How Much Can I Borrow?The maximum amount you can borrow each academic year depends on your grade level and dependency status. See the chart below for annual and aggregate (lifetime) borrowing limits. You may not be eligible to borrow the full annual loan amount because of your expected family contribution or the amount of other financial aid you are receiving. To see examples of how your Subsidized or Unsubsidized award amount will be determined. Direct loan eligibility and loan request amount must be greater than $200 for a loan to be processed. If you are a first-time borrower on or after July 1, 2013, there is a limit on the maximum period of time (measured in academic years) that you can receive Direct Subsidized Loans. This time limit does not apply to Direct Unsubsidized Loans or Direct PLUS Loans. If this limit applies to you, you may not receive Direct Subsidized Loans for more than 150 percent of the published length of your program. See your financial aid adviser or https://studentaid.gov/StudentAid.govhttps://studentaid.ed.gov/types/loans/subsidized-unsubsidized#eligibility-time-limit for more information. Subsidized and Unsubsidized Loan ExamplesExample 1: Alberta Gator is a first year dependent undergraduate student. Her cost of attendance for Fall and Spring terms is $17,600. Alberta’s expected family contribution (EFC) is $10,000 and her other financial aid (such as grants, scholarships and work study) totals $9,000. Because Alberta’s EFC and other financial Aid exceed her Cost of Attendance, she is not eligible for need-based, Subsidized Loans. She is, however, eligible for an Unsubsidized Loan. The amount she would be awarded would be $5,500. Even though her cost of attendance minus other financial aid is $8,600, she can only receive up to her annual loan maximum (which is $5,500 for a first year dependent undergraduate). Subsidized and Unsubsidized Loan LimitsThe amount you can borrow through the Federal Direct Loan Program is determined by your dependency status and classification in college. The annual and aggregate loan limits are listed in the charts below.
* Some professional students may be eligible for increased unsubsidized loan limits. Contact your adviser to determine if you are eligible. To Apply for a Subsidized and Unsubsidized Loan:
To be Eligible You Must:
To Receive Your Subsidized or Unsubsidized Loan:
Do Unsubsidized loans accrue interest immediately?Another type of federal loan is an unsubsidized loan. With a federal unsubsidized loan, you are responsible for the interest from the moment the loan money is disbursed into your account. There's no help on the interest; you're responsible for the whole amount.
Do student loans start accruing interest right away?Interest starts to accrue (grow) from the day your loan is disbursed (sent to you or your school). At certain points in time—when your separation or grace period ends, or at the end of forbearance or deferment—your Unpaid Interest may capitalize. That means it is added to your loan's Current Principal.
How often does interest accrue on unsubsidized student loans?Most student loans accrue interest daily and compound either daily or monthly. Daily accrual means that lenders will divide the APR by 365 and apply that daily interest rate to your principal balance each day.
During what period do subsidized loans accrue interest?They start accruing interest the day you receive your loan. The federal government pays the interest on subsidized loans while you're a student at least half-time, during the six-month grace period following graduation and during any loan deferments.
|