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johnnyx9
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Confused about Stafford UNsubsidized 24 Apr 2007, 06:17
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What is the difference between a Stafford unsubsidized loan and a regular commercial loan? I'm guessing the interest rate is a bit lower than what you would obtain with a commerical loan, but is there anything else I'm missing?
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gelato
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Confused about Stafford UNsubsidized 24 Apr 2007, 11:22
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No origination fee, I think.
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naturallight
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Confused about Stafford UNsubsidized 24 Apr 2007, 11:25
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my stafford SUBsidized loan has an origination fee of 1%. So I would guess the unsubsidiezed version would as well.
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lhotseface
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Confused about Stafford UNsubsidized 24 Apr 2007, 11:37
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I know Duke has no origination or guarantee fees for unsubsidized loans. You might want to get your federal loan from outside.

naturallight
my stafford SUBsidized loan has an origination fee of 1%. So I would guess the unsubsidiezed version would as well.
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pelihu
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Confused about Stafford UNsubsidized 24 Apr 2007, 12:08
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The unsubsidized Stafford has no credit requirements because it is backed by the Federal government. As long as you haven't defaulted on prior student loans, you can still borrow even if your credit sucks.

Also in the future, you'll have opportunities to consolidate your loans - and once again there are no credit requirements for this type of loan.
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naturallight
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Confused about Stafford UNsubsidized 24 Apr 2007, 16:59
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Quote:
I know Duke has no origination or guarantee fees for unsubsidized loans. You might want to get your federal loan from outside.
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Hmm, are you sure? My financial aid award shows the full amount ($8500), but some other materials show the budget, and the fee is incorporated in the budget. So that's how I know it's there.

I can't think of any reason why a Federal loan would differ from school to school. Anyone know? (Maybe the loan is lower risk b/c Duke kids have better career prospects!)

I need to read this stuff again. Good thing I donтАЩt want to go into Finance. Oh waitтАж
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Confused about Stafford UNsubsidized 24 Apr 2007, 17:58
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Yeah, I checked again. The unsubsidized loan doesn't have any origination or guarantee fees.
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Confused about Stafford UNsubsidized 25 Apr 2007, 13:05
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Ok, I did some investigation--check page 8 of this Entrance Counseling website offered by the Feds (I guess you have to pass this test to get your federal loan).

The loan fee, or borrower origination fee, is another expense of borrowing a Direct Loan. The loan fee is subtracted proportionately from each loan disbursement. The loan fee charged for Direct Subsidized and Unsubsidized Loans is currently 3 percent of the amount you borrow. This fee will be reduced annually according to the following schedule:

(and then it goes on to say that next year, the fee will be 2.5%).

https://www.dlssonline.com/borrower/Entr ... ingPage.do

However, later on it talks about a 1.5% up-front interest rebate amount. (If you miss one of your first 12 payments, they add this back to your principal--you lose the rebate).

So the 2.5% origination fee less the 1.5% up-front rebate is where I get my 1% figure from. All of this looks to be done at the Federal level, so I would guess it applies to all students. But maybe some schools kick in that extra 1% to get rid of the fee completely. I dunno.