I'm currently sitting at about $14,000 USD in loan debt, and am still enrolled at university. I will estimate about $10,000 is unsubsidized, making the remaining $4,000 subsidized. I was fortunate enough to receive some recurring scholarships last semester that will cover all of my expenses - a full ride, essentially. However, my university financial aid office is still offering me certain amounts of subsidized and unsubsidized loans for this semester.

It occurred to me that if I accept the full amount of subsidized loans and use the money to pay the unsubsidized loans, I could essentially convert my debt to being entirely subsidized in a couple semesters.

My question: is there anything wrong with doing this? Would there be some "gotcha" when I finally graduate? Or is this plan really as safe and smart as I think it is?

  • 1
    Could you edit and add a country tag. Regulations vary from country to country.
    – Dheer
    Commented Jun 25, 2015 at 8:11
  • Are the interest rates the same? Commented Jun 25, 2015 at 15:31
  • We can assume for all intents and purposes a similar interest rate between the two.
    – Dagrooms
    Commented Jun 25, 2015 at 18:21
  • You disclosed all your scholarships when you applied for financial aid and they still offered you subsidized loans?
    – user102008
    Commented Jun 25, 2015 at 20:17

1 Answer 1


I did this, graduated, and did not explode. Based on this fact, I think you can do it too. There are no gotchas I am aware of.

  • I've been tricked by my university's financial aid office before; that's how I got into the $14,000 debt, or at least half of it. Thanks for sharing your experience!
    – Dagrooms
    Commented Jun 25, 2015 at 18:23

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