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What is the difference between a subsidized and unsubsidized student loan?

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Subsidized and Unsubsidized Student Loan

There are two kinds of Stafford Loans: subsidized and unsubsidized.

Federal Subsidized Stafford Loans

Low-interest funds that must be repaid by the student. Interest-free while you are enrolled at least half-time (6 credits) in a degree-seeking program (undergraduate or graduate). Borrowed directly from the federal government. To be used for education-related expenses such as tuition, fees, books, living costs, transportation, and child care. Payments are deferred for six months after the student graduates, leaves school, or enrolls in fewer than 6 credits. The maximum repayment period is 10 years. Loan fees, not to exceed 3.0% of the amount borrowed, will be deducted from each semester’s disbursement. First time borrowers of Stafford Loans at RRCC are subject to a 30 day hold of their first loan disbursement.

Federal Unsubsidized Stafford Loans

These loans accrue interest while a student is enrolled in school (and during the repayment period). Are borrowed directly from the federal government. Can be used for education-related expenses such as tuition, fees, books, living costs, transportation, and child care. Payments are deferred for six months after the student graduates, leaves school, or enrolls in fewer than 6 credits. The maximum repayment period is 10 years. Loan fees, not to exceed 3.0% of the amount borrowed will be deducted from each semester’s disbursement. First time borrowers of Stafford Loans at RRCC are subject to a 30 day hold of their first loan disbursement.

Please see our Financial Aid, Types of Aid, and Loans webpages for more information.

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