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Whats the difference between the subsidized and unsubsidized Stafford Loan?

April 26, 2017difference loan Stafford Subsidized Unsubsidized

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Whats the difference between the subsidized and unsubsidized Stafford Loan?

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For the subsidized Federal Stafford Loan, the federal government pays the interest on the loan while you are in school and during your six-month grace period after you graduate or drop below half-time status. You are not responsible for any interest on the loan until you actually begin repayment of the loan principal. For the unsubsidized Federal Stafford Loan, you are responsible for the interest on the loan from the date that loan funds are disbursed. While you are in school, you can choose to pay the interest on a quarterly basis or you can choose to have the interest capitalized, or added to the loan principal. If you choose this option, you will pay more overall since you will be paying interest on interest when you begin repayment of the loan principal six months after you graduate or drop below half-time status.