What's the difference between subsidized and unsubsidized loans?
The main difference between subsidized and unsubsidized loans (besides interest rates) is that interest does not accrue on subsidized loans during periods of deferment, while it does accrue on unsubsidized loans. This makes subsidized loans the less-expensive option for students.
Stafford Subsidized loans
Stafford Subsidized Loans are federally guaranteed loans based on financial need. Interest does not accrue on the loan while you are in school at least half time, or during any future deferment periods. The federal government "subsidizes" (or pays) the interest during these times. Additionally, there are maximum amounts you can receive per school year.
- Freshman: $3,500 per year
- Sophomore: $4,500 per year
- Junior: $5,500 per year
- Senior and 5th year: $5,500 per year
Stafford Unsubsidized loans
Stafford Unsubsidized Loans are federally guaranteed loans that are not based on financial need. Interest does accrue from the time the loan is disbursed to the school. Additionally, there are maximum amounts you can receive per school year for dependent and independent students.
- Freshman: $2,000 for dependent students, $6,000 for independent students
- Sophomore: $2,000 for dependent students, $6,000 for independent students
- Junior: $2,000 for dependent students, $7,000 for independent students
- Senior and 5th year: $2,000 for dependent students, $7,000 for independent students
Stafford Loan Frequently Asked Questions
- Am I eligible for a Stafford Loan?
- How do I apply for a Stafford Loan?
- Are there Stafford Loan deadlines?
- What's the difference between unsubsidized and subsidized loans?
- When do I receive the Stafford Loan funds?
- What are the Stafford Loan interest rates?
- How much can I borrow under a Stafford Loan?
- What is EFC and how is it calculated?
- What can I use a Stafford Loan for?
- Are there specific schools that accept Stafford Loans?
- Do I have to apply for a Stafford Loan every academic year?
- Can I receive a Stafford Loan if I have bad credit/declared bankruptcy/have late payments on credit cards?
- Will I pay any fees for a Stafford Loan?
- What are the repayment options for a Stafford Loan?
- What are the penalties for early payment or if the loan is paid in full before scheduled (deferred) payments begin?
