Several factors can increase your total loan balance when dealing with financial aid through FAFSA:
Accumulation of Interest: Loans accrue interest over time, increasing the total amount owed. This interest can accumulate while you're in school or during deferment periods.
Borrowing Additional Loans: If you take out additional loans to cover educational expenses beyond what was initially offered, your total loan balance will increase.
Loan Fees: Some loans may have origination fees or other charges associated with them, which increase the total amount borrowed.
Capitalization of Interest: Unpaid interest on subsidized federal loans may be capitalized, meaning it's added to the principal balance, leading to increased overall borrowing costs.
Extended Repayment Terms: Opting for longer repayment terms can reduce monthly payments but increase the total amount repaid over the life of the loan due to accruing interest.
Understanding these factors can help students make informed decisions about borrowing and managing their student loans effectively.
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