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What is the difference between a Federal Subsidized Stafford Loan and the Federal Unsubsidized Stafford Loan?

April 26, 2017Federal loan Stafford Subsidized Unsubsidized

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What is the difference between a Federal Subsidized Stafford Loan and the Federal Unsubsidized Stafford Loan?

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The Subsidized Stafford Loan does not accrue interest on the principal of the loan until the loan is in repayment. The Federal Unsubsidized Stafford Loan does accrue interest on the principal of the loan as soon as the loan has been fully disbursed. On a quarterly basis, the interest on the unsubsidized loan can be paid or allowed to capitalize into the amount of the loan.