Payoff of subsidized loan at graduation

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Payoff of subsidized loan at graduation

Postby ssb2013 » Tue Apr 23, 2013 1:04 pm

Apologies as I see a similar question was asked on the forum a couple of years ago, but things change, so I want to be sure I am working with current information.

My daughter will start college this fall and qualifies for a $3500 "subsidized federal direct loan".

First, is that the same as a subsidized Stafford loan?

Second, if we were able to pay off the loan in full immediately upon graduation, am I correct in believing it would have essentially been an "interest free" loan for the four years? (i.e., there would no interest owed at the time of graduation - just the $3500 borrowed?)

Many thanks.
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Re: Payoff of subsidized loan at graduation

Postby Aid Whiz » Fri Apr 26, 2013 7:09 am

That is all correct - those loans are often referred to as Stafford Loans, Federal Direct Loans, and Federal Stafford Loans, but they are all the same thing.

For subsidized loans, if paid off upon graduation, they will be interest-free. Interest does not accrue on these until repayment begins, 6 months after leaving school (or immediately after leaving school for graduate students).
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Re: Payoff of subsidized loan at graduation

Postby ssb2013 » Sat Apr 27, 2013 8:41 am

Thank you!
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