What is the difference between subsidized and unsubsidized Federal Direct Stafford Loans?
The federal government pays the interest on subsidized Federal Direct Stafford Loans while you are enrolled at least half-time and during your six-month grace period. You are responsible for the interest on an unsubsidized loan. While you are enrolled, the interest will accrue until repayment begins. Many times, students have both subsidized and unsubsidized Direct Stafford Loans during the same semester. Another difference is that subsidized Direct Stafford Loans have a lower interest rate than the 6.8% rate of unsubsidized Direct Stafford loans.
