What is the difference between subsidized and unsubsidized Direct Stafford Loans?
Federal Direct Subsidized Stafford Loans are need-based loans available to undergraduate and graduate students enrolled at least half-time. The government pays the interest to the lender on behalf of qualified borrowers for as long as students are enrolled at least half-time in a degree-seeking program and for six months thereafter, at which time repayment of the principal and interest must begin. Payment is deferred if the student returns to school. Federal Direct Unsubsidized Stafford Loans are non-need-based loans available to undergraduate and graduate students enrolled at least half-time. The government does not pay the interest to lenders on behalf of the borrowers. Repayment of the interest is the student’s responsibility from the date the loan is disbursed and may be paid or capitalized (added) to the principal balance of the loan. Repayment of principal does not begin until six months after the student drops below half-time. Payment is deferred if the student returns to school
