04.27.09 | What is an Unsubsidized Stafford Loan?
An unsubsidized loan is a loan for which the borrower is fully responsible for paying the interest regardless of the loan status. Interest on unsubsidized loans accrues from the date of the disbursement and continues throughout the life of the loan.
For example, if your unsubsidized loan is disbursed during your first semester of school in September of ‘09 it will begin accruing interest each month thereafter, but you will not be required to begin repayment of said loan until you fall below a half time or greater status in school. If you are in school 4 years a $5,000 loan can easily turn into a $6,500 loan by the time you get out pending your interest rate.
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Filed under: Federal Loans, Interest Rates
