Subsidized College Loans

Written by Nicole Madison
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The bad news is that the cost of attending college and graduate school increases every year. Students find it consistently harder to manage tuition and other school related expenses without the help of student loans. Fortunately, federal programs are in place that offer students and parents a way to finance college education and pay for it in monthly payments after graduation. Unfortunately, keeping up with all those payments can feel like trying to push a heavy boulder up a steep hill--totally exhausting. The good news is you can consolidate your subsidized college loans as well as your unsubsidized loans into one larger loan.

Consolidating Subsidized College Loans
The government pays the interest on subsidized college loans while the borrower is enrolled in college at least half time as well as during grace periods or deferment. Many borrowers worry they will lose the interest subsidy on their student loans if they choose to consolidate. They need not worry. When a borrower consolidates student loans, subsidized college loans and unsubsidized college loans are grouped separately to ensure the borrower will not be held responsible for extra interest on the subsidized loan.

The government continues to pay the interest on the portion of your consolidation loan that initially consisted of subsidized college loans while you are in deferment status. However, Federal Nursing Loans and Perkins Loans do not retain their subsidy benefits after consolidation. Keep this in mind when you are considering applying for a consolidation loan.

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