Can you pay back a Stafford Student Loan with a Federal Pell Grant?
nindash asked:
I have taken out a stafford student loan for my college tuition this semester. I may receive a federal pell grant on the newer fafsa this year. Am I able to apply the federal pell grant money to my existing loan debt?
I have taken out a stafford student loan for my college tuition this semester. I may receive a federal pell grant on the newer fafsa this year. Am I able to apply the federal pell grant money to my existing loan debt?
It depends on what type of stafford loan you took out: whether it was subsidized or unsubsidized. I assume that you are already familiar with the two types, considering the approval conditions you must meet in order to be approved to take out a loan, so I will spare the explanation.
The Pell Grant is generally sent to your school. Any money the college receives in regards to financial aid is handled by the school. Tuition, fees, etc. are withdrawn from your financial aid disbursement. The rest of it is then disbursed to you. That disbursement, if you choose, can be applied towards paying off your loan.
But like I said, it depends on the conditions of your loan. Some companies will let you make payments on it whenever you wish. Other companies will forbid it. If you’ve taken out a subsidized loan, the government will pay for interest until you’re out of school.