Rahel Osei, a dependent student, graduated from college in May 2018 with the maximum ($31,000) allowable amount in Stafford Loan debt; however, this was far less than the total cost of her schooling. Additionally, her parents had planned far enough in advance that Rahel demonstrated each year sufficient financial need to qualify for the maximum amount under the subsidized loan program. Her parents are wondering how much their planning paid off. Her parents have posed the following questions to you. Base your analysis on the disbursement schedule.

a.What was the actual total balance on her loans the August after she graduated?

b.How much total interest did Rahel avoid on her subsidized loans during college and since her graduation (the subsidy continues during the six-month grace period) as a result of the subsidy?

c.What is the combined monthly payment, based on the standard ten-year repayment plan, for her subsidized loans?

d.What would her combined monthly payment have been if her loans had not been subsidized? (Although not completely accurate, assume that the balance in August will still be the same.)

e.How much additional interest would Rahel have paid if she had not qualified for any subsidized loans?

f.How much was the subsidy worth?