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

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. More.

With the subsidized Stafford Loan, the interest is paid by the government while you are in school. The interest on the Unsubsidized Stafford accrues while you are in school. You have the option of paying the interest or deferring it until after you graduate, at which time it will be added to the principle of the loan.

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