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Extra Federal Aid...Return it?

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  • Extra Federal Aid...Return it?

    I have about $10k extra of student loans. I'm not sure if its accruing interest or not, keep hearing mixed things regarding trump suspending interest on student loans. My servicer says this when I goto return the funds: "Because you selected payment dates within 120 days after funds were released to you (disbursed), these payments may be applied as refunds" "Refund payments directly reduce the amount of money you originally borrowed (principal), recalculate any existing accrued interest based on reduced principal, and may reimburse a portion of the federal loan origination fees.

    Does this mean I am not accruing interest right now? If I am, does that mean it will be reversed since I am returning it?
    Is there something better I should do with the money like reinvest it or something? Not sure if the interest really has been suspended or I should keep it for an extreme emergency (thats like a 6-8 month emergency fund for me)

    Thanks guys. Sorry...I'm not good with this stuff

  • #2
    It sounds like it is accruing interest but if you return it within 120 days then the interest will be forgiven.

    Do you have a need for it? Most medical students need a few thousand to get started in residency - moving expenses, security deposit, first months' expenses before first paycheck comes in etc. If you have money to cover that then I'd return it.

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    • #3
      Make sure you have a small emergency fund and then return the rest.

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      • #4
        Originally posted by CordMcNally View Post
        Make sure you have a small emergency fund and then return the rest.
        But if Im not paying interest right now, would it harm to hold onto it until last minute?

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        • #5
          Originally posted by asdfgghk View Post

          But if Im not paying interest right now, would it harm to hold onto it until last minute?
          It wouldn't but I probably wouldn't mess with the hassle in case something with the interest messes up.

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