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

April 26, 2017loan Stafford Subsidized Unsubsidized

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

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The government pays the interest on the need-based Subsidized loan while the student is enrolled at least half-time in school. The non-need based Unsubsidized loan accrues interest at a fixed rate of 6.8% while the student is enrolled. Students have the option of making interest-only payments on the Unsubsidized loan, but are not obligated to do so.