Law School Discussion

18.5 subsidized cap?

Erapitt

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Re: 18.5 subsidized cap?
« Reply #10 on: March 02, 2006, 11:09:54 AM »
Correct, subsidized do not accrue interest while you are in school.  Well, actually, they accrue interest, but the government pays for it.

Re: 18.5 subsidized cap?
« Reply #11 on: March 02, 2006, 11:14:42 AM »
-There is a maximum subsidized amount of 8500
-Subsidized and unsubsidized loans will cover up 18,500
-On July 1, the unsubsidized rate will be 6.8%
-On the subsidezed loans the government pays the interest while you are in school

-Thus, if you have the money available it makes sense to get the subsidized loan because the money you would spend today can sit in an account and accrue interest for the next three years.  You then use the same money but you have also made a little bit of money that way that can go twoards paying off the rest of the loans.

upNdown

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Re: 18.5 subsidized cap?
« Reply #12 on: March 02, 2006, 01:05:25 PM »
Correct, subsidized do not accrue interest while you are in school.  Well, actually, they accrue interest, but the government pays for it.

Correct.  And I'm not financial wiz, but as far as I can tell, the interest on that $8500 per year works out to about 3 grand over 3 years, at 7%.  That doesn't seem like much, but if you take 15 years to pay off your loans, then that $3000 grows to over $8000.  So, the subsidy isn't a huge difference, but I'd still call it significant.