Subsidized Student Loans   

When it comes to student loans, there are so many questions, you could probably fill your whole bank account with them.  What do all the technical terms mean?  For how long will I have financial consequences for getting into debt in order to gain an education?  When it comes to federal aid, the questions continue.  However, the information is readily available, if you are willing to search.  In this article, we will discuss a little of the information that you will need to know about a subsidized student loan, one of the most common forms of federal aid awarded to students all over the nation. 

What Is Subsidized Student Loan?  

As you may be aware, there are a few different types of federal aid for students.  Stafford loans are divided into a few different varieties, including subsidized and unsubsidized.  The differences have to do with the interest paid, the terms set, and the individual who receives the loan.  Subsidized student loan is the most common type of financial aid awarded to college students today.  These loans are only available for those in great need of money to attend college.  Usually, the financial aid advisor helping the student will do anything they can to secure all available funds from the government before urging the student to apply for a subsidized loan.  The payment plan for subsidized student loan stretches anywhere from 8-10 years, or even up to 25, with the interest rate fixed somewhere around 7%.  Until the student graduates, the government will actually pay the interest every month.  Also, a grace period of six months is awarded to the student after graduation, and the payment of the interest is continued until after that point.  After the six months of time post-graduation, the full responsibility for the payment of the loan and the interest falls once again on the shoulders of the student. 

Who Are Qualified for Subsidized Student Loans? 

The truth is, anyone who really wants to borrow money for college can receive a subsidized student loan.  It is not based on the student’s actual financial need.  However, in order to qualify for the loan, it is required that the student be attending a college or university at least half-time.  For many colleges, this means about six credits of classwork.  As far as repayment is concerned, this may be determined on an individual basis.  Depending on your income, circumstance, and opportunity, you can choose a plan that allows you to repay the Stafford loan and interest for up to 25 years.  Because the Stafford loan is a federal student aid, the interest rate is fixed at a certain percentage, and will not increase as the years go on. 

To find out more about Federal Stafford loans, contact the financial aid office at your local college or university.