December 07, 2001
By: Bev Dodd
Student loan: The only loan you'll ever need
Financial aid or a student loan covers the education costs that you can't pay for. Most financial aid is awarded to families on the basis of eligibility or need, which is determined by the school you attend. This is based on information you provide about you and your family's ability to pay for your education costs and formulas set by law for a student loan. We'll discuss this more below.
The process of student loan sales and loan transfers can be confusing at times. This is especially true if you do not properly keep track of who holds your student loan. In order to avoid problems associated with loan sales and transfers, it is critical that you read and maintain any correspondence you receive on your student loan. Loan transfer/sale notifications will tell you where to send your loan payments and whom to contact for assistance on your loan. If you do not send your payment to the correct location, you can inadvertently become delinquent on your student loan.
And finally, remember the differences between a subsidized and unsubsidized Stafford student loan. The unsubsidized Stafford is not need-based, which means it's available to students at any income level. Unlike the subsidized version, the student, not the school, is responsible for interest on the loan. So you can either make interest payments while you're in school, or wait to pay off the interest on your student loan. After you graduate, the interest on your loan will be added to your total debt.
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