To begin with, I will define the basic points of each loan. Subsidized loans are awarded on the basis of financial need. You will not be charged any interest before you begin repaying the loan because the federal government subsidized the interest during this time.

Unsubsidized loans charge interest from the time the money is first disbursed until it is paid in full. The interest is capitalized, and this means that it is added to the amount of your loan. This of course, will increase the amount you will have to repay.

What Is The Student’s Needs? 

Another apparent difference to keep in mind between subsidized and unsubsidized loans involves the demonstration of need. With subsidized loans, students must prove that they have a certain level of need for financial assistance for being considered.

The opposite is true of unsubsidized loans. Unsubsidized loans are typically available to students without consideration or regard to their financial circumstances. This point can change the picture considerably in regards to the loan you apply for.

You Can Have Both Loans 

Subsidized and unsubsidized loans may be held at the same time. So this means that there is no need to wait to pay off one type of loan before applying or obtaining another.

Also, there are some loans that are both subsidized and unsubsidized. With this type of loan, the borrower (yourself) is then responsible for some of the interest (on the part of the unsubsidized loan), yet not on all of it (the remaining part being the subsidized loan).

It can become somewhat tricky, but you can handle it. You are going to college!

Use Your Financial Aid Office 

Your financial aid office will determine your eligibility for your loans. You can receive a subsidized loan and an unsubsidized loan for the same enrollment period as long as you do not exceed the annual loan limits.

Only you can determine how much money you will really need to borrow. As part of your financial aid package you will be offered a maximum amount you can borrow. This does not mean you have to accept all of that money. You should have already made a spending plan prior to applying for any student loan that will help you with this.

This will give you a good estimate as how much you will need according to your savings, any family aid, employment, etc. The first year will be the most difficult. Thereafter, the best way to monitor your student loan borrowing is to determine what your monthly payment will be each time you borrow.

If a need comes up later in the academic year you can always go back and ask to borrow some of what your originally declined. Remember, you have already been awarded and offered that money prior.

The less you borrow now, the less you will have to repay later. Student loan interest rates are variable and although they have been as low as 3.42%, Federal student loans can go as high as 8.25% and that can mean a big difference in your monthly payment.

Keep Records Of Your Loans

You need to keep track along the way of your expenses. That way you will know what payment you will be facing and then you can make a wise decision whether it is smart to accrue more debt.

A good source to find out more regarding subsidized, unsubsidized loans and other student loan programs is to get a free copy of “The Student Guide” which is published by the U.S. Department of Education.

Just because the rent for your off-campus apartment does not show up on the bill from your university doesn’t mean it’s not a school expense. Off-campus housing can be paid for with financial aid. Here is how to get a student loan to pay for off-campus housing.

First, remember it is a loan and must be paid back. It is best to determine your budget for your monthly rent and compare all of your options. If finances are the issue, your choices will usually be dictated for you.

Consider your transportation options, taking into account expense and convenience, time and safety during all of the months and multiple seasons of the year.  At this point this might seem strange, however, when looking for an off-campus location, but decide which would benefit you more socially, intellectually and/or physically. In the long run, all of these factors can eventually add or subtract money in your pocket in the end.

Get a copy of your rent contract and your utility bills and any other school related expenses not included on your university bill.  Visit the financial aid office to talk about your situation and verify your documents. It is always best to have everything in writing and everything understood before you leave that office.

Generally, you will want to meet with a fulltime staff member rather than a student. Try to get an appointment with the cashier or counselor.

If you demonstrate suitable need, you can get your financial aid package altered. You may need to provide the cashier’s office or the financial aid office (whichever handles your bills) with a bank account number.

Most universities work with direct deposit, as it is much faster and there is less paperwork. Bring in your checkbook, the routing number and your account number, which is written at the bottom of each check.

If your school sets up a direct deposit transfer, notify your bank that you will be receiving money from your school. Remember, to apply for a loan from a private lender for this. While federal grants must be used on tuition and books, other lenders don’t care what you spend the money on as long as you pay it back.

If you are taking out a loan for your entire school expenses, all of the monies can be used, as you desire. After your tuition is paid off, your school will probably write you a check for what is left over from your financial aid. This is yours to spend on whatever you wish (off-campus housing, for example).

Generally, financial aid offices estimate room and board costs regardless of where a student lives. So if you need more money, it is usually just a matter of extending your loan in general.

If you decide to live somewhere significantly more expensive than the average student in the off-campus housing department, you may find yourself having to pay the difference. Most institutions have a calculated average of how much a student needs for housing.

Yes, you can use your student loans for anything you want related to college. Grants have to be used for tuition or for books, but loans can be used for anything. I used mine to pay off credit cards that I had used to pay for school for previous years.

I have been told many times that whatever is left over from a grant and/or a loan after it has been applied to your tuition is yours to spend as your desire. They have no way of knowing what you spend it on.

Student loans are to be used for cost of attendance, which can include off-campus housing and living expenses. However, your financial aid office at your school is the ultimate arbiter of what is legit, although most would agree that off-campus housing is on the up and up.

Now, I have heard of many not so legit things that student loan money gets used for. Sure, they cut you a check for the extra excess money and how can they really know? But be warned, that if they find out that you are doing something illegal with loan funds, you might find yourself with your loans “decertified” and unable to get more.

There are loans that are called “Direct Student Loans” These student loans can be found in almost all kinds of the media. Today there are plenty of these types of direct student loans, for school tuition, off- campus living, even direct student loans to buy your first car. Such is the host of many options that are more than willing to take your money. Remember that choosing one of these types of loans becomes a difficult task and necessary to research and to read and reread all of the fine print.

Student loans can be used for things such as an apartment, (off-campus), transportation needs, food, books, supplies, etc. if it is necessary to complete your education. Remember, your student loans are yours and they are also yours to be repaid. No matter what you choose to use them for they will not go away until they are repaid in full by you. They are loaned to you for your educational needs and can be around for a very long time if you do not use the loan or loans wisely.

Some students are going to school while raising children only on their student loans. However, on the opposite end they can be squandered and bring many regrets and sorrows, along with a lifetime of bad credit.

A friend of mine had taken out three loans for school and made small payments here and there when he could, often times forgetting about them altogether. He then started to receive many letters requesting payment, which he also ignored. Finally, to his surprise his entire check was garnished. He had not been attending college for the past six and had another two years to go before he completed his college education.

Many students go through their youth with little desire to even consider reading a statement from their lender for their student loans.  This can be a dangerous decision because it can quickly sneak up on you and come to bite you in the rear.  I suggest that you take the time if you are in college now to pay attention to when you have to start paying your lender and how much.  If it has jumped on your back recently like a clinging monkey then you might need to take action immediately to get a good plan set up for your student loan repayment.

There are a couple simple things to find out to make sure that you can get on the right track to paying off your loans.

1. What is the loan classified as?

There are many types of loans that are out there and they all are going to have different requirements for you based on what terms they have established with the loan.  Many students will find American government funded loans such as the Sallie Mae, Stafford, Perkins, or PLUS loans. 

There are certain loans where you will have the full responsibility and then there are loans like the PLUS loan that is your parents obligation to repay.  If your parents have done that for you then I would suggest that you are a very lucky person.  I would look to do what you can to help pay for it in the future if you are able to create financial security in a short period after college.

There should be a thorough list of paperwork that you should keep by your organized in a file of some kind or typed up on to a computer.  Read through all of the terms to know when you have to start paying and how much is required of you.  Also get a good understanding of any penalties you may have for late payments, just to know what you would have to deal with and how short of a leash your lender has given you.

If you have lost the paperwork then contact the school’s financial aid office to get documentation on what you owe.  This information is easy to gather and shouldn’t take too long for you to get back on track if you have been a miserable mess for the past couple years.  If the school doesn’t have it then they will get you in touch with who does.  This is information that is your legal possession that you can always gain access to.

2. How much am I going to pay you?

When you apply for these loans there are decisions made by the Department of Education as to how much they can offer to your student situation.  They might give you more than you need or not enough and require you to go get another loan from another source.

You will receive statements probably at the end of each semester that you are in school giving you an understanding of how much you borrowed and how much you owe.  Keep these on file just in case if there are errors in their system as to what actually is going on.  This will save you a lot of time.

Make sure that you separate your forms from any scholarships that you may have received because there are plenty of documents out there from many different companies.  Make sure you know first if you are getting a Pell Grant or some kind of scholarship before you get a student loan and for how much because the last thing you want is to get a loan that you don’t need.

3. Who is it that I am paying back?

When you make a decision to go with a certain type of a loan you will also decide which bank you will lend from.  The bank usually will go through a thorough process and decide on how much to give you and then if they do pay you it will probably be on a semester basis until you are finished with school.  Make sure to stay in school if you can to avoid the messy idea of deferring payments.  Many students do it for plenty of solid reasons and it can be taken care of, but with some banks it can be a hassle.

The bank will sell off the loan to Sallie Mae to make more money and in turn you become the possession of Sallie Mae, which is the government established Student Loan Marketing Association.  This association was established to create more loan opportunities for students across the country and has been hailed as one of the best achievements in government action along with the creation student loans since in the 20th century.

Now there are going to be times when Sallie Mae will not only buy up the loan, but sell it to other companies and each time this transaction may happen with your loan, you will be notified so you know who it is that you are paying your bills to.  The terms and conditions will stay the same, but make sure to be on the ball because some companies may be less lenient then others.