A student is graduating from college in 12 months but will need a loan in the amount of $9,529 for the last two semesters. The student may receive either an unsubsidized Stafford Loan or a PLUS Loan. The terms of each loan are: Unsubsidized Stafford Loan: annual interest rate of 5.95%, compounded monthly, and a payment grace period of six months from time of graduation PLUS loan: annual interest rate of 6.55%, compounded monthly, with a balance of $10,172.23 at graduation Which loan will have a lower balance, and by how much, at the time of repayment?

The Stafford loan will have a lower balance by $244.04 at the time of repayment. The PLUS loan will have a lower balance by $244.04 at the time of repayment. The Stafford loan will have a lower balance by $431.17 at the time of repayment. The PLUS loan will have a lower balance by $431.17 at the time of repayment.