Subsidized vs. Unsubsidized Stafford Loans

Stafford Loans can be either subsidized or unsubsidized. The subsidization of your federal student loans determines whether you or the government will pay the interest on those loans while you’re in school, in your grace period after leaving school, or in an authorized period of deferment.

Subsidized Stafford Student Loans

The government will pay the interest that accrues on your federal subsidized student loans while you’re in school and during any authorized deferment periods during which your monthly student loan payments are postponed.

Subsidized Stafford loans are need-based student loans awarded to students who demonstrate financial need.

Unsubsidized Stafford Student Loans

You’re responsible for all interest that accrues on your unsubsidized federal student loans, even if you’re not currently making any monthly student loan payments because you’re in school or in an authorized period of deferment. Even while your payments are deferred, interest will continue to accrue and will be added to the principal balance of your student loan and capitalized for you to pay back once you begin or resume making your student loan payments.

Unsubsidized Stafford student loans are available to all eligible undergraduate and graduate students, regardless of financial need.

Quick Links

» Apply for a Stafford student loan
» Stafford student loans: Overview
» Eligibility for Stafford student loans
» Stafford loan amounts
» Stafford loan rates, fees, and terms
» Top questions about Stafford student loans