What is the difference between the Subsidized and Unsubsidized Stafford Loans?
The Subsidized is a need-based loan and the interest rate is capped at 8.25% with no interest accruing until six months after you graduate or withdraw from school. The Unsubsidized is not need based, and the interest rate is also capped at 8.25% with interest accruing while you are in school. You have a choice to either pay the interest while in school or defer the interest until your six-month grace period is up after you graduate or withdraw from Sherman College.
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 are in school. With an unsubsidized Stafford, you are responsible for the interest while you are in school. You can either choose 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.
A. 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 by the government while you are in school. You have the option of paying the interest or deferring it on the Unsubsidized Stafford until after you graduate, at which time it will be added to the principal of the loan.
