Subsidized Stafford loan

For those students who have been granted eligibility, the subsidized Stafford Loan is recommended. This loan can be used to cover a portion of the student's cost of education. The primary benefit is that the U.S. Department of Education pays the interest that accrues on this loan while the student is in school or during any loan deferment period.

The student would need to satisfy that he/she is in school and enrolled at least half-time, based on the school's definition of half-time status. The Department of Education will cover all interest charged during the period the student is enrolled at least half-time and for the six month grace period given to the borrower after graduation or separation (ceasing to be enrolled at least half-time). Further, if the borrower, while in repayment, should need to take out a deferment such as an unemployment deferment or because of a return to school (in-school deferment), the government would pay the interest during those periods, as well.

There are many reasons a student might qualify for a subsidized student loan. One might be if a student's parents' financial means are far less than what is required to cover their child's education. However, it is important to note that the FAFSA must be completed before receiving any federal loans. The federal government uses a universal formula to calculate a family's financial ability to assist in paying for their child's education. A student wouldn't be eligible to receive subsidized student loans simply because their parents refused to pay for a specific college for one reason or another (i.e., location, size, program options, religious affiliation, etc.). This student would have to find other options to pay for college such as college scholarships and/or taking out a private student loan.

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