7 Things You Need to Know About Unsubsidized Student Loans

Need to know more about what an unsubsidized student loan is? You’re in the right place! This video goes over the 7 things you need to know about unsubsidized student loans in order to pay them off on the schedule you choose, and how they’ll impact your life in the years to come. Enjoy!

[@TheDivaIsIntheDetails]

Capitalizing is such a trap and adds to the cycle of keeping people in debt. I liked your explanation. New subbie here.

[@siddharthanikhindi5993]

This is a very informative video. I'm starting my 2nd year of college in a month and ngl, I regret taking the unsubsidized loan cause I thought the interest starts building up after college is done. Thanks for the info!

[@Argo035]

Hahaha felt your pain when you said, "which is super messed up, haha," about paying back interest while you're in school. Thanks for the video!

[@kristenhicks1225]

I literally am waiting til I’m 24 just to qualify for subsidized loans lmao. My parents won’t sign. My only option is unsubsidized.. or scholarships.. but I wasn’t the best pupil in hs so I don’t really qualify for scholarships. I’m 22 now, almost 23 in 3 months. I have 1 year and 3 months until I can go to college. I’ve been waiting 4 years now. If I had my parents to help me I would’ve graduated by now. Pretty horrible feeling but it is what it is❗️ I gotta save money! I’m going to school to be a nurse ☺️

[@foundfinances5891]

Kristen!! You are a warrior! Home stretch it seems now, crazy how our systems that are seemingly made to lift us up, can keep us stuck for so long! sending you lots of good vibes on your journey to get the education you deserve.

[@tabithaellis6506]

Unsubsidized is a scam omg, I wish i hadn't accepted those loans. I also had an opposite situation with #7 we get less as we continue in college each year.

[@twuggygotgame]

Thank you! Sincerely, someone enrolling in freshman year!!

[@ajfam871]

Very helpful. Thanks you. My daughter is got into LMU after Transfer from Community College. It’s a little confused overwhelming.

[@elizabethpatton8364]

I’m hyperventilating….as I’m watching…😳 this is messed up! ☹️

[@shirohc7015]

If you begin to pay the principal loan off while still in school and the interest accrues annually, will the interest tacked on be based on the original loan amount or whats left of the principal at the end of the year?

[@milenmunoz9450]

Are the monthly payments made on the FAFSA page or on the school page?

[@foundfinances5891]

The federal government sells your loan to a third party student loan servicer, who you will pay your monthly payment to directly. One common servicer is EdFinancial.

[@jonnierambo8858]

US student loans are so much more complex than the UK student loan system! Interesting stuff, thankyou 😁

[@foundfinances5891]

glad you enjoyed! I know little about the UK student loan system. More stream lined than this? haha

[@jonnierambo8858]

Found Finances it’s so simple. You apply for a student loan, with the option to apply for a maintenance loan (cash, intended for rent, food, etc. which is typically used for drinking lol). The amount given on this loan is dependant on what your parents make. It’s all at the same interest rate and you don’t have to start paying anything back until you start earning over £20,000 per year

[@foundfinances5891]

@@jonnierambo8858 Wow, having a grace period on repayment until you start making a "livable" wage makes so much sense.... thanks for the info :)

[@jonnierambo8858]

Found Finances yup, the debt is written off after 40 years aswell

[@foundfinances5891]

@@jonnierambo8858 !! insane...

[@IStayLift3d]

Hi, so I am about to start grad school and I am thinking about accepting my direct federal unsubsidized loan. So to avoid interest that accrues while I’m in school, I should pay it while I’m in school? Is it monthly payments during school? And does interest keep accruing even after I graduated and start my repayment plan? Sorry for all the questions

[@foundfinances5891]

Sorry for such a delay in response, these are GREAT questions. So if you start paying off your loans while in school, you will work to decrease your principal balance, which in turn will decrease how much interest you pay over time since interest is a percentage % of your principal, if that makes sense? It could totally be in your best interest to start paying back your principal as it most likely will save you money over time. Your interest will keep accruing until the SECOND you send in your final payment, so yes, interest will still accrue even when you start your repayment plan (so messed up, all of it!)

[@queenmarie3012]

Thank you for the information!

[@MikoHimiv3]

If I took out a loan during freshmen year with a 5% interest, and then took out another loan of the same amount during my sophomore year, will i then have two loans that are both accruing 5% interest separately and at the same time?

[@foundfinances5891]

that is correct, you have two separate loans that both will be accruing 5% individually (its not like they were combined and now you pay 10% interest on one loan, if that helps?)

[@dovareme]

Thank you for the informative video

[@jeangreygal]

Say if there are three sessions in one Spring semester, (A, B, and C). If you receive a loan disbursement for 5000, is that amount only good for the A semester, or could you potentially receive more money from the university if you elect to enroll in B and C sessions? Any advice would be greatly appreciated.

[@foundfinances5891]

Sorry for the delay in response - my understanding is that you receive a loan disbursement ONCE at the beginning of the Spring semester, and it can be used towards any of the spring sessions/educational expense. Since an unsubsidized loan is typically distributed directly to the university, the university should put your loan towards any educational expense (tuition) you owe. I hope that was somewhat useful...pls let me know if you learned something and I'm mistaken

[@MASON92J]

Are you able to start paying the loan back right away or do you have to wait until after you graduate? Is there a better option for someone who is able to start paying right away?

[@foundfinances5891]

Great question, you can start making payments at any time once you have taken out a loan, you don’t need to wait until after you graduate (I didn’t!) - I say, if you’re accruing interest on your loan it can’t hurt to start working to pay off the principal as soon as you can

[@chinneynz7861]

You are an awesome teacher. Capitalizing sucks!!!!!!!

[@karikapatel]

Hey, if I start paying back my unsubsidized loan+interest after graduation and grace period, will my interest capitalize?

[@sweetcutie1279]

I’m about to max out of grants with financial aid and I’m just finishing my second semester at UHD I already have my Associates degree but trying to get bachelors in social work what do you recommend I’m a single mom scared to get loans but also thinking of giving up cuz I don’t want to end up in debt

[@foundfinances5891]

It's funny right bc loans are a form of debt but they help you avoid other kinds of debt that can be more dangerous! If you feel you have exhausted all your other options to cover your education costs, I think loans through the government are one of the safest ways to borrow money that you currently don't have. In the best case scenario, federal student loans can cover your education expenses so your income can go to other life essentials (and you can focus on your schoolwork) hope this is of any help

[@RomeoJuliet4never]

This was very helpful. Thank you.

[@carlosalfredito]

Great vid!

[@Mountain_Spirit]

When are you supposed to pay the interest? While at school or after?

[@foundfinances5891]

Typically with repayment, whenever you choose to start repaying (during school or after graduation), your payments will eat away at interest FIRST, and then get at your principle amount. A rule of thumb can be to always have a large enough monthly payment so that you are chipping away at your principle amount, not just your interest. You are not required to make payments on your loan until after graduating/dropping below half time. It's up to you if you'd like to start paying off your loan while you are still an active student. Hope that helped!

[@CinemaOpinion9]

Thank you for a great explanation.

[@porschadominguez8262]

Good job on your video can you do one on subsidized loans

[@foundfinances5891]

So glad you liked it, and I did! there is a video up on my channel for Subsidized loans as well, let me know if you need help finding it and I can send you the link!

[@bryantfarkarlun4518]

What if you took the loan and after a year you drop out because of a job or career or being drafted? What happen after the one year drop?

[@foundfinances5891]

My understanding is that once you take a loan out, and it is distributed to you (meaning it was used to pay for school expenses) you are responsible for paying the loan back, plus interest. Once you drop below half time, (dropping out would count as dropping below half time) the repayment process will begin, where they will expect you to start paying off at least a small portion of your loan each month. That's how I understand it, I hope tht was helpful!

[@KKCrazyGamer22]

Do the student receive the full amount deposited into the student account or do the loans pay the school directly?

[@foundfinances5891]

For the unsubsidized loan, the loans go directly to the school. They never show up in a student’s individual banking account

[@AnnaKwonda]

Very informative--thank you!

[@harshitbali06]

thank you

[@LVluxlife]

Now it’s 7.5% 😩

[@alyssayager6207]

Can you pay off interest while in school and wait to pay off your principal til after school?

[@foundfinances5891]

You can start making payments on your loan whenever you would like. Those payments most likely will go to decreasing your principal, which is in your best interest! The smaller the principal the less interest will accrue over time, if that makes sense? So in a way, by working to pay off your principal while in school works to also decrease how much total interest you accrue, hope that helps!

[@chantalchacho1630]

Hi I’ve been accepted to grad school recently (still need to pay deposit to secure spot but I’m planning to do so). The school sent me estimated loan amounts. They will send me official financial package in April but you mentioned that I need to apply for loans like in March? So how does that work? Is that just to fill FASFA application or to actually request the loan? I’m confused... I don’t know if I made sense.

[@foundfinances5891]

you made total sense! Sorry if I was confusing, I meant that you need to submit your FAFSA application by March 2021 in order to be eligible for financial aid (i.e. be able to take out loans) for a fall 2021 school start - if you've been accepted, have filled our your FAFSA, and are now waiting for your financial aid package, theres nothing left for you to do at the moment with regards to getting student loans! Once the school offers you a financial aid package in april, they will give you instructions on how to set up the student loans you have been awarded. I hope this helped, pls let me know if you have any further questions!

[@1252PFC]

Can you request this loan even after starting college? Meaning in the middle of first year or even sophomore year, apply for it?

[@foundfinances5891]

Yes yes you can! You’ll do this by applying for the FAFSA application for the following year, you can apply for this each year you attend high education (and should apply each year) - this application normally opens in September or October and closes March of the following year. So the FAFSA for next school year 2021-2022 is open now and you can fill out the application to see if you are eligible to start receiving aid beginning in the fall of 2021 - hope that helps!

[@1252PFC]

@@foundfinances5891 Thank you....look like my daughter (student) has to apply for it. Because going thru my parent portal, am not seeing the option.

[@foundfinances5891]

@@1252PFC Excellent point, the student whose education the loan will be paying for will need to be the one to fill out and submit the FAFSA, even though most of the information on the application has to do with you the parent's income over the past few years. I would definitely recommend sitting down with her to fill it out :) I know I had no clue what I was doing when I filled out my first FAFSA back in 2015.

[@ヌエミハイジ]

can the unsubsidized loan pay for my housing in collage?

[@foundfinances5891]

it depends! To the best of my knowledge, the only way you could use the unsubsidized loan to pay for housing is if the housing is provided by your school. If you want to rent off campus, I don’t believe you can use your unsubsidized loan for it.

[@darkrise4503]

I have one question- My parents don’t want to provide any information for my fafsa. So, How can I fill up that?

[@parismorlin2153]

My mom (single parent) did the same thing when I was a senior in high school. I ended up just finding out her social security number from a document in our house and making an account for her using my email. Then the website just pulled everything from her SSN... probably not the best approach, but it was easier than applying as a financially independent student (which I wasn't). I think that's your only other option.

[@foundfinances5891]

Paris has an awesome point here, and I would agree my only other recommendation would be to file as an independent (which is a tax filing you would do if you file taxes) which means then you wouldnt be dependent on your parents or guardian for any information to get you financial aid, it took me a few months for the independent filing to go through in my experience

[@jayshankarchandran321]

So you got unsubsidized loan amount of $28000 for each year you were in college or all the 4 years combined ?

[@foundfinances5891]

all 4 combined! good q

[@Seriesofcrystal]

Hi could you tell me what it means if my college says they will increase my unsubsized loan to 2,500 like will i get that money ?

[@foundfinances5891]

Hey! Depending on what year of school your in, usually your unsubsidized loan increases ever year, which just means you’re allowed to borrow more money than you could the year before (up to $2,500 now) if you choose to take out an unsubsidized loan you will totally get that money, but it will be sent directly to your school to pay for tuition, it’s not something that will show up in your personal bank account. Let me know if that helps at all

[@Daytondaily]

@@foundfinances5891I thought leftover money after tuition was sent to you?

[@jeffwallace5931]

Can I get subsidized student loans direct to my bank account?

[@foundfinances5891]

Unfortunatley, no. They will be distributed by the government to your school who will reflect them on your bill statement

[@nicolepersaud4864]

Hii, are you allowed to make interest payments while attending school?

[@foundfinances5891]

You are allowed to make payments on your loan (including against the interest) while you are in school!

[@drrobinson6802]

Need a loan 5 to 2 mil

[@foundfinances5891]

same fam

[@hassanbolden766]

Can you increase your unsubsidized loan ?