Financial Aid Q & A: Borrowing Colorado Springs CO

Financial Aid Q & A: Borrowing

Tell me about Subsidized Stafford Loans.
A subsidized loan means that the federal government pays the interest to the lender while a student is in school and during other periods when students are not required to make payments. Because the government is paying the interest during periods of enrollment, students are not responsible for paying the interest and interest does not accrue until repayment begins. Once in repayment, the student is then responsible for paying the interest on the loan as well as the principal amount borrowed.

To receive a Federal Subsidized Stafford Loan, need must be demonstrated under the federal need formula. In other words, when your Expected Family Contribution (EFC) is subtracted from the cost of attendance, the result must be greater than zero for you to be eligible to borrow a Federal Subsidized Stafford Loan. The determination of need and loan amounts offered are determined by the financial aid office(s) you submit your financial aid application information to. Borrowing is further limited by other aid your child has been awarded, as well as the annual maximum loan limits applicable to the program.

Tell me about Unsubsidized Stafford Loans.
Unsubsidized loans provide assistance to students who may not demonstrate need according to the need formula discussed earlier but who would benefit from having access to a low-interest federal student loan program.

Author: Amy Ambler

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