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What’s the difference between a subsidized and an unsubsidized Stafford loan?

April 26, 2017loan Stafford Subsidized Unsubsidized

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What’s the difference between a subsidized and an unsubsidized Stafford loan?

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Subsidized Stafford loans are awarded on the basis of financial need. With a subsidized Stafford loan, any interest that accrues while you’re in school, in deferment or in your grace period is paid by the government. If you’re in forbearance, you’ll be responsible for paying any interest that accrues. Unsubsidized Stafford loans are non-need-based, so if you’re an eligible undergraduate or graduate student, you can qualify for unsubsidized Stafford aid regardless of your own income or your parents’ income. With an unsubsidized student loan, even when you’re not making payments (while you’re in school, in deferment, in forbearance or in a grace period), interest is accruing, and you’ll be responsible for paying that interest.