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What is the difference between the subsidized Stafford loan and the unsubsidized Stafford loan?

April 26, 2017loan Stafford Subsidized Unsubsidized

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What is the difference between the subsidized Stafford loan and the unsubsidized Stafford loan?

3 Answers

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The subsidized Stafford loan is awarded to eligible students based on need, and interest does NOT accrue on the principal of your loan while you are enrolled in school at least half-time. The unsubsidized Stafford loan is not based on need, and interest accrues on the principal of your loan from disbursement.

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Subsidized loans are need based loans. Freshmen are eligible to receive $3500, sophomores $4500 and JR/SR $5500. Need is determined from the FAFSA results. The government is paying the interest while the student is in school at least half time for the subsidized loan. Unsubsidized loans are not need bases but are limited to the same amount as the subsidized. Those students that have a parent that has been denied for the PLUS loan are eligible to receive additional unsubsidized loan funds. For students enrolled in professional or graduate programs, the educational loan limit per year is $18,500 from the Federal Stafford Loan program. After July 1, 2007, the annual limit will be $20,500.

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Subsidized loans are need based loans. Freshmen are eligible to receive $3500, sophomores $4500 and JR/SR $5500. Need is determined from the FAFSA results. The government is paying the interest while the student is in school at least half time for the subsidized loan. Unsubsidized loans are not need bases but are limited to the same amount as the subsidized. Those students that have a parent that has been denied for the PLUS loan are eligible to receive additional unsubsidized loan funds. For students enrolled in professional or graduate programs, the educational loan limit per year is $20,500 from the Federal Stafford Loan program.