MONEYSCHOOL'S Simplified Guide
to FAFSA and Federal Student Aid

Section 7: Subsidized Stafford Loans

Subsidized Stafford Lloans may be originated either as Direct loans from the Department of Education or as federally-guaranteed FFEL loans from private lenders.  Subsidized Stafford loans to undergraduate students carry a lower interest rate than unsubsidized Stafford loans. 

In addition, the Department of Education pays the interest on subsidized loans while you are in school and for six months after you leave school.  The amount of a subsidized loan may not exceed your financial need, which is your cost of attendance minus your EFC.  See the table in Section 10 for annual loan limits, interest rates and fee.