When comparing unsubsidized loans to other federal aid, they are the least desirable of the federal student loans, but they are better than Parent PLUS loans and private, alternative loans from lenders.
This statement is based on the total cost of repaying the student loan. Here are factors to consider when requesting and accepting unsubsidized student loans.
The loan interest rate is a flat rate of 6.8% compared to PLUS loan of 7.9% and Alternative Loans at 12+%.
Interest starts being calculated once the loan has been disbursed.
Borrowers with "In school deferments" are strongly advised to pay the interest quarterly to avoid having it be "capitalized" or added to the loan amount.
If the interest is added to the loan amount (capitalized) you will be charged interest on ever increasing loan amounts.
Students do not need to pass a credit check, but must be in good standing on any existing student loans (not in default).
Income is not a factor in determining eligibility for unsubsidized loans... even Bill Gates could qualify for one if he returned to college!
Bankruptcy has no impact on eligibility for unsubsidized loans.
There are annual loan amount limits based on student's grade level and dependency status.
There is also a "lifetime loan amount limit" based on dependency status as well as undergraduate or graduate status.
To calculate the Quarterly Interest Amount, multiply the loan amount by .017.
Log into your Direct Loan Servicer account to see loan balances and to conduct online banking.
For total loan balances, including Perkins and federal loans from other schools, log into NSLDS.