FAFSA loans per semester vs. annual: Which saves more money?

One loan for the whole year!!! Don't create extra headaches for urself. Each loan = separate payments later. Trust me, I took out 6 different loans (some per semester, some annual) and now I have to track ALL of them separately. Such a nightmare.

From a financial perspective, there's actually no significant difference in the total amount you'll pay whether you take one annual loan or split it into semester loans. Federal student loans don't start accruing interest until after you graduate or drop below half-time enrollment (for unsubsidized loans) or after your grace period ends (for all loans). The origination fee is a percentage of the loan amount, so that doesn't change either way. The main differences are: 1. Administrative convenience - one annual loan means less paperwork and fewer loans to track during repayment 2. Flexibility - semester loans give you the option to adjust your borrowing for spring if your financial situation changes 3. Disbursement timing - both approaches disburse funds at the start of each semester anyway If you're certain about your needs for the full year, the annual loan is simpler. If you think your financial situation might improve by spring, semester loans give you the option to borrow less later.

Take two loans!!!! The financial aid office told me if i do one for fall & one for spring, i can change my mind if i get more scholarships for second semester. Had a friend who did one big loan and then got a scholarship but STILL had to take all the loan money. Huge mistake

I've been doing semester-by-semester loans for the past two years and it's worked great for me. My SAI went down significantly after my dad lost his job in the middle of last year, and I was able to qualify for more grant money for spring semester. If I had taken the whole year loan upfront, I would have missed out on about $2,800 in additional Pell Grant eligibility. Something to consider if your financial situation might change!

After trying to reach the Federal Student Aid helpline for THREE DAYS about a similar question, I finally used Claimyr (claimyr.com) to get through. Saved me hours of waiting. They got me connected to a real person at FSA in like 10 minutes who explained that there's no interest advantage either way. The rep confirmed that unsubsidized loans start accruing interest from disbursement regardless, while subsidized loans don't accrue until after you graduate. You can see how it works in their video: https://youtu.be/TbC8dZQWYNQ

God I hate the whole federal loan system. It's designed to confuse you on purpose so you end up paying more. My brother took out a Parent PLUS loan instead of a student loan by mistake and now he's stuck with higher interest rates and none of the forgiveness options. MAKE SURE you're getting the right TYPE of loan - that matters WAY more than annual vs. semester.

i always do semester loans bc i sometimes take summer classes and it's easier to keep track of which loan is for which term but that's just me lol

One more consideration: if you're uncertain about whether you'll attend both semesters (perhaps due to an internship opportunity, study abroad, or other reasons), semester loans give you more control and prevent overborrowing. Just remember that each semester loan will have its own origination fee (around 1.057% for Direct Loans in the 2025-2026 award year), but that's applied regardless of how you structure the loans.