How About Federal Subsidized Loan ?

Subsidized Stafford Loans – They’re in Your Interest

Subsidized Stafford Loans are federal Stafford Loans that are offered to undergraduate and graduate students who demonstrate a financial need. In order to qualify, a student’s Expected Family Contributions (EFCs) as determined by the government’s FAFSA (Free Application for Federal Student Aid) must be low.

When the government subsidizes a federal Stafford Loan, they agree to pay for the interest that accrues on the loan during the time you are in school and throughout the course of your grace period, or the breather they give you after you graduate and before you start making loan payments. The government will also pay your interest during times when you’ve been authorized to defer the loan. It’s easy to keep the subsidized status if you remain enrolled in an approved program at least half time and there are no major changes to your family’s EFC.

Unsubsidized undergraduate school loans are not awarded to students based on need. Consequently these loans require borrowers to pay any interest that accumulates on their loans while in school, during periods of deferment and during grace periods. Interest on subsidized federal student loans, on the other hand, is paid by the U.S. government during those same time periods. For both types of federal loans, borrowers are allowed to defer any payments until after they graduate. This assumes that students remain in approved programs on a half time or full time basis.

You can read another articles about Federal Subsidized Loan at How much can I borrow from direct subsidized loan ?