How Much You Can Expect to Borrow

Who do you contact if you've already accepted more loan money than you need? Your school's financial aid office Your loan servicer Your parents

Your school's financial aid office

The Difference Between What You're Offered and What You Need What You Need

You can borrow less than your school offers and can request more loan funds later if you need to. You should borrow only what you need. Accept less by contacting your financial aid office.

What increases your total loan balance? Interest accrual Interest capitalization Both interest accrual and interest capitalization None of the above

Both interest accrual and interest capitalization

How can you reduce your total loan cost? Make interest payments while in school Make interest and principal payments while in school Make interest and principal payments during the grace period Any of the above

Make interest and principal payments while in school

The Impact of Interest

Remember how interest increases the cost of your loan: The principal amount you take out to pay for school is different than the amount you will pay back because of the effect interest has on your balance. The faster you pay off your debt, the less interest you pay overall. Making interest payments while you're in school can save you a significant amount of money. Here's Why: 01 Student Loan Interest Accrues Interest accrues daily on federal student loans, even when you're in school and not making payments. The amount of interest that accrues per day: is calculated by dividing the interest rate on your loan (as a decimal) by the number of days in a year, and then multiplying that by the outstanding principal balance. 02 Student Loan Interest Capitalizes If you don't pay the interest on your Direct Unsubsidized Loans and grad PLUS loans as it accrues, the interest will be capitalized (added to your outstanding principal balance) at the end of your six-month grace period (for Direct Unsubsidized Loans) or at the end of your six-month post-enrollment deferment (for Direct PLUS Loans). Capitalization increases your outstanding principal balance, and interest will then be charged on that higher principal balance. Unpaid interest is generally capitalized under certain conditions, such as: following the grace period or periods of deferment on Direct Unsubsidized Loans, following periods of forbearance on any type of Direct Loan, or if you voluntarily leave certain repayment plans. Previous

The Difference Between What You're Offered and What You Need What You're Offered

Your school determines your financial aid offer—including your loan amount—based on the cost of attendance and other aid you've received. In most cases, your school will disburse your federal student loan money by crediting it to your school account to pay school charges. If the loan disbursement amount exceeds school charges, the remaining balance of the disbursement will be paid to you directly by check or other means.