What are unsubsidized loans?

Although it might be easier to secure an unsubsidized student loan so you can pay your way through college or university, before you sign on the dotted line, make sure you review the loan details.  Some unsubsidized school loans are designed with high interest rates that you must pay after you graduate with your degree.

Of course, the first avenue you will want to take when seeking a way to fund your college or university education is to look for scholarships, grants and fellowships.  You can also find money to pay for your undergraduate or graduate degree via work/study programs and/or internships.  These options will keep you from having to pay back loans after you graduate.
However, you might not always get enough money from these forms of financial aid.  In this case, you might find it beneficial to apply for a student loan.  If you apply for a student loan, you’ll be joining thousands of other half-time and full-time students who are currently receiving funding for college or university via a student loan.

Where to Get Unsubsidized Student Loans to Pay for College or University

Student loans are available through the United States Department of Education as well as through private organizations.  In fact, some privately owned companies provide student loans to children of their employees.  Loans are also provided based on the economic conditions that students and their parents’ meet, with guaranteed federal student loans (i.e. subsidized student loans) generally going to students who demonstrate a financial need.  If you or your family don’t meet federal poverty guidelines, you might not qualify to receive an unsubsidized student loan.

Akin to subsidized student loans, you won’t have to start repaying your unsubsidized student loan until after you graduate from an accredited college or university with your degree.  Interest rates on the loans are generally fixed and kept low, about six to seven percent as of 2011. Depending on the accredited college or university you attend and the amount of tuition at the postsecondary school you might be able to receive as much as $12,000 in financial aid through an unsubsidized loan.

Paying Back Unsubsidized Student Loans

You are responsible for paying the interest that accrues on the loan.  You must be a citizen or permanent resident of the United States and you must also sign an agreement stating that you will repay the loan after you graduate from college or university.  If you are attending graduate school or if your parents want to take out a separate loan to pay for your college education, there is the PLUS loan.  Unlike the unsubsidized loans, PLUS loans must be repaid as soon as they are distributed.  You and/or your parents are also responsible for paying interest on PLUS loans.

To apply for unsubsidized student loans through the federal government or private financial institutions, complete a Free Application for Federal Student Aid (FAFSA).  You also might have to submit a copy of your and your parents’ previous year’s federal income tax returns.  Also, unlike subsidized student loans, your credit history might be checked before the loan is approved.

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