What is the difference between Subsidized and Unsubsidized Federal Stafford Loans?

The federal government pays the interest on subsidized Federal Stafford Loans while you are enrolled at least half-time and during your six-month grace period. You are responsible for the interest on an unsubsidized loan. While you are enrolled, the interest will accrue until repayment begins.

Many times, students have both subsidized and unsubsidized Stafford Loans during the same semester. Another difference is that subsidized Stafford Loans have a lower interest rate than the 6.8% rate of unsubsidized Stafford loans. More.

Subsidized loans are loans that the federal government is responsible for paying the interest while the student is in school. Sometimes, part or all of the loan is awarded will be classified as unsubsidized, meaning the student, rather than the government, is responsible for the interest while enrolled in school. More.

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