What is the difference between the Subsidized and Unsubsidized Stafford Loan?
With the Subsidized Stafford, the government pays the interest while you are in school. The interest on the Unsubsidized Stafford is not paid while you are in school, and you have the option of paying the interest or deferring it until after you graduate at which time it will be added to the principle of the loan.
With a Subsidized Stafford, the interest is paid by the government while you are in school. The interest on the Unsubsidized Stafford is not paid by the government while you are in school. You have the option of paying the interest or deferring it until after you stop attending school, at which time it will be added to the principal of the loan. Back to TOP.
The Subsidized Stafford loan is awarded to students who demonstrate financial need. The government pays the interest on this loan while the student is enrolled in school at least 1/2 time (6 credit hours). The government does not pay the interest on the Unsubsidized Stafford loan while the student is in school. A student who is awarded an unsubsidized loan is given the choice to either make interest payments or defer the payments until he or she graduates, withdraws from school, or drops below 1/2 time status. In this instance, the interest will be added to the principle of the loan at repayment. There is a 6 month grace period before repayment begins.
A Stafford Loan is a government-guaranteed loan available to students. There are two types of Stafford loans; subsidized and unsubsidized. With a subsidized Stafford, the government pays the interest while you’re in school. With an unsubsidized Stafford, you are responsible for the interest while you are in school. You can either elect to pay the interest while you are in school or defer it until after graduation. You should note that if you defer the interest, it will be capitalized upon graduation and will raise the overall cost of your loan.
With the Subsidized Stafford, the interest is paid by the government while you are in school. The interest on the Unsubsidized Stafford is not paid while you are in school. You have the option of paying the interest or deferring it until after you graduate at which time it will be added to the principle of the loan.
Related Questions
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