Need student loan help

[fabfive]

My son got three offers
Direct Subsidized
Direct Unsubsidized and
Direct Plus

I am so confused about these loans. Can you give me guidence? Pros and Cons. If the plus loan requires an endorsor, are they released of responsibility after a certain time frame?

 

[Sarahlovy]

Plus loans are referred to as parent loans, and the signers are not released after time. They typically have higher interest- they are the worst of the ones offered. Subsidized loans do not start accruing interest until after graduation- they are the best type to choose. Unsubsidized loans have the same terms as subsidized loans, but the interest starts accruing as soon as you take out the loan, but you do not have to pay on them until you graduate.

 

[mickeytattoo95]

If you can, take the full amount of subsidized they are offering and as little of the unsubsidized as possible.

 

[stacielee]

Also, the PLUS loans go into repayment immediately.

 

[4HppyCamprs]

Yep first take as much of the subsidized loan as possible..that is the best..then the unsubsidized and skip the plus loan if you can.

 

[SFWife]

My advice- avoid student loans like the plague. You can look for small loans from your bank and hunt down scholarships and grants as much as possible.

I have been fighting a nightmare battle for over 17 years now with the government over a student loan that I never received. They keep insisting that I pay back money+ interest on a loan that was never dispersed. I even have proof from the school that it was never received. The loan was only for 1000, but they decided that my PRINCIPAL balance was over 9K, and added on another 8K in penalties and interest. They can't produce a copy of a cancelled check, or any documents to prove that the loan was ever processed, but they just keep telling me that its the federal government, and I can't dispute the debt.

 

[calypso*a*go-go]

Our daughter was only offered an unsubsidized loan and the parent plus loan, and the interest rates were high (in my opinion), I noticed an ad in the paper this morning for a home equity loan for 3.25%...which is half the interest rate offered through the student loans -- in our case, I think this would be a better option than anything offered through the university. So shop around and see if you can find a better rate. Good luck!!!

 

[Kellydelly]

Our daughter was only offered an unsubsidized loan and the parent plus loan, and the interest rates were high (in my opinion), I noticed an ad in the paper this morning for a home equity loan for 3.25%...which is half the interest rate offered through the student loans -- in our case, I think this would be a better option than anything offered through the university. So shop around and see if you can find a better rate. Good luck!!!

I think any money guru would have a problem with you putting your house on the hook for a "student loan."

 

[calypso*a*go-go]

I think any money guru would have a problem with you putting your house on the hook for a "student loan."

Probably, but I guess the difference would be whether or not the parents are going to be the ones making the payments...which would be our case. I'm honestly disgusted with all the hoopla over student loans and the supposedly "low interest rates". What was offered to us was almost 7%, which I don't think is low at all.

 

[kamik86]

I used all three for school.

Subsidized is the best. There will be no interest while your in school and you don't have to make payments until 6 months after graduation (or if you drop below half time 6 months after that). There are limits to how much you can borrow each year though. There may be a limit to how much subsidized you can get based on what the FASA said you need was. Also if your son goes to grad school (even if his job is paying for it after graduation) at least half time these will go into deferment again and be 0 interest until he graduates grad school.

Unsubsidized you don't have to pay interest (or the loan either) while in school but the interest does accrue. There is a limit to how much you can borrow of federal stafford loans (which count both the subsidized and unsubsidized) so if you need to borrow more a year then these limits then you will have to finish with plus loans.

Plus loans are actually for the parents. My mom took one of these for me too. They have higher interest then the ones above and you have to start paying them back soon after they are dispersed (generally meant around the end of the school year for my mom).

Obviously as posted above their are other options like home equity loans etc. If you are willing to go that route but then your house is on the line if something happens and you don't have the forbearance and deferrment options of the federal stafford loans.

 

[kamik86]

Probably, but I guess the difference would be whether or not the parents are going to be the ones making the payments...which would be our case. I'm honestly disgusted with all the hoopla over student loans and the supposedly "low interest rates". What was offered to us was almost 7%, which I don't think is low at all.

The problem is a few years ago they were variable rates. Those were very low rate but then people thought they shouldn't be variable anymore so they went to fixed rate for all loans... of course then they were 6.5%

I have loans from before and after the change. My loans from before are at 2% which I locked in after I graduated.

 

[msmayor]

Also, the PLUS loans go into repayment immediately.

Plus loans are actually for the parents. My mom took one of these for me too. They have higher interest then the ones above and you have to start paying them back soon after they are dispersed (generally meant around the end of the school year for my mom).

Not that this makes a PLUS loan better, but it IS possible to defer the repayment on a PLUS loan...they don't HAVE to go into repayment immediately.

As long as the student remains full-time, parents can request repayment deferment until graduation. Interest will continue to accrue and be capitalized.

 

[ancestry]

My son got three offers
Direct Subsidized
Direct Unsubsidized and
Direct Plus

I am so confused about these loans. Can you give me guidence? Pros and Cons. If the plus loan requires an endorsor, are they released of responsibility after a certain time frame?

Direct Subsidized - the government pays the interest on this loan.

Direct Unsubsidized - the student pays the interest on this loan but it accrues until the student is out of school.

Both the Direct Subsidized and the Direct unsubsidized are paid back by the student. The parents have NO obligation what so ever to pay these loans.

Direct Plus - this is a parent loan. Payments can begin immediately. Interest accrues immediately and the parents are completely responsible for the loan unlike the other two where only the student is responsible for repayment.

 

[luvsJack]

My advice- avoid student loans like the plague. You can look for small loans from your bank and hunt down scholarships and grants as much as possible.

I have been fighting a nightmare battle for over 17 years now with the government over a student loan that I never received. They keep insisting that I pay back money+ interest on a loan that was never dispersed. I even have proof from the school that it was never received. The loan was only for 1000, but they decided that my PRINCIPAL balance was over 9K, and added on another 8K in penalties and interest. They can't produce a copy of a cancelled check, or any documents to prove that the loan was ever processed, but they just keep telling me that its the federal government, and I can't dispute the debt.

Did you take out a student loan and then change your mind?

The school should be able to contact Sallie Mae or Direct Loans and get it straightened out. Also you should be able to go to the NSDLS website and see this loan and see if it says it was disbursed. If it says it is, the school is responsible for straightening this out or should at least be able to show you that it was disbursed and where the money went. If it says it was not, then there is no reason for anyone to say you need to pay anything. We have students that have problems like this come in every semester.

Or if you never even applied for a student loan--chances are someone used your social security number. If that is the case, then again the school should be able to produce something that shows it was a different person. For instance, we would print an ID using the social security number and it would show us the person that gave us that number.