College awards vs loans???

[msdznyduck]

Okay, DS got his initial offer from the office of financial aid (based on FAFSA)of the college he 'may' go to.

Quote from them..."we are pleased to advise you of you eligibility for the financial assistance listed below."
Awards
Federal Direct subsidized Stafford Loan $XXXX
Federal Direct unsubsidized Stafford Loan $XXX

What the heck does that mean? Does this mean he qualifies for an award or a loan? Looks like a loan,but the wording sounds more like a grant.
Is this all? or will he get more assistance? Not much if you ask me.

Can anyone shed some light on this for me??

Thanks

 

[iggbees]

http://studentaid.ed.gov/PORTALSWebApp/students/english/studentloans.jsp?tab=funding

i had a federal perkins loan and some other loan from my college. the perkins loan had a lower percentage rate i believe 5% as opposed to 8%.

i also had a federal direct subsidized loan i believe. we had to apply for all these things through fafsa.

 

[funhouse8]

You financial aid awards from the goverment are loans. They are lower interest but this makes me laugh. They want you to believe they ar giving you something. There are grants & schholorships that you can get from each individual college. When he gets his acceptance letter it will state what the cost is of their program and how much money they will be giving him. Good luck.

 

[Dan Murphy]

Subsidized, interest not accruing nor due till out of school, unsubsidized, interest due while in school.

Here is a great book on college funding. I recommend a new one each year, things do change a bit, year to year.

http://www.amazon.com/gp/product/03...002-1218707-6208069?s=books&v=glance&n=283155

 

[iluvepcot]

You are right these are not grants and will need to be paid back. They will accumulate each year and at the end you will add up your perkins/us subed stafford and subed stafford. All principal plus intrest will need to paid after your son graduates. The diffrence is the unsubed starts to gain intrest added to the principal right away as you borrow it. The subbed does not start getting intrest until you graduate because the government will sub the intrest.

I just helped my nephew secure all his loans. On top of these my brother also has a parent plus loan. It is expensive

 

[EthansMom]

Quote from them..."we are pleased to advise you of you eligibility for the financial assistance listed below."
Awards
Federal Direct subsidized Stafford Loan $XXXX
Federal Direct unsubsidized Stafford Loan $XXX

What the heck does that mean? Does this mean he qualifies for an award or a loan? Looks like a loan,but the wording sounds more like a grant.
Is this all? or will he get more assistance? Not much if you ask me.

Can anyone shed some light on this for me??

These are both LOANS that would have to be paid back. The SUBSIDIZED LOAN is such that your DS would not have to make any payments until he finishes or quits college. While your DS is in school, there would be no interest accruing on the loan. With the UNSUBSIDIZED LOAN, you or your DS would have to make payments on at least the interest starting from the time the loan was made.

We will finish paying off DH's student loans this year. He had many thousands of dollars in subsidized loans. He didn't have to make payments on the loans until he finished college. And then, he was able to consolidate all of his different subsidized college loans into one loan with a very long (20? or 25? year) repayment term. With recent low interest rates and being able to deduct the student loan interest on our taxes, the federal student loans have treated us pretty well.

Now, on the other hand, DH also had one unsubsidized loan that his mom had promised to pay the interest on. Well, his mom flaked and through all of the statements in the garbage without opening them. Low and behold, several years after the loan was taken out, MIL finally opens a statement. Turns out that the loan (taken out in StepFIL's name) is more than double the initial loan amount, what with fees and compounding interest. In the interest of family harmony, DH and I ended up having to pay that loan too.

So, a good rule of thumb: If you need funding, take the subsidized loans first. Don't take the unsubsidized loans unless absolutely necessary.

If your son qualifies for scholarships, those will be announced in a different letter and will specifically say "scholarship". One hint: I was able to get a scholarship simply by talking with the head of my department in the first week of college. It certainly can't hurt for your DS to contact the department head directly to inquire about any scholarships!!!!

Good Luck!