UnThreaded | Threaded | Whole Thread (9) | Ignore Thread Prev | Next
Author: SethJohnson One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 311083  
Subject: Re: I should know this... Date: 9/6/2004 2:39 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
Another thought, Michele - can you correct your check box with PHEAA to request that your loans for this year NOT capitalize the interest? Perhaps they will allow you to reverse this decision should you wish.

I recently re-enrolled in school to finish my degree with the help of student loans. Each letter to me detailing a loan amount comes with this statement:

This letter is to remind you that you are responsible for the interest which accruses on your unsubsidized Fedreal Stafford loan(s)....

Please be aware that federal regulations require that any payment received within 120 days of a Stafford loan disbursement be appied as a refund of that disbursement. This means that you could see a reduction in your principal balance, but no reduction in your accrued interest balance after a payment is made. This federal regulation benefits you by reducing the principal balance upon which interest accrues.

So it may not matter WHAT box you checked when you applied for the loan, payments made within 4 months of a disbursement should be applied to your principal, not accrued interest, which is even better.

Of course, I don't know that much about the legalities of student loan accounting, so YMMV.

Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (9) | Ignore Thread Prev | Next


TMF Credit Center
The Motley Fool Credit Center arms you with real tools and simple messages, that will help you in every credit situation.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.