Subsidized Stafford Loan

This loan is a federally funded loan provided to students through the U.S. Department of Education. This loan requires unmet financial need. The federal government will pay the interest while the student is enrolled in school and during the six-month grace period. The student must repay the loan plus a variable or fixed rate of interest beginning six months after leaving the school or dropping to less than half-time status.

Generally, students enrolled in a certificate program or a degree program without having completed 30 credit hours may borrow up to $3,500 per year or the amount of unmet financial need, whichever is less. Students who have completed more than 30 credit hours in a degree program at the time of application may borrow up to $4,500 per year or the amount of unmet financial need, whichever is less.

Direct Student Loan Changes

Direct Subsidized loans will not be eligible for an interest subsidy during the six-month grace period.

Subsidized loans are loans for which the borrower is not responsible for the interest while the student is enrolled in college on at least a half-time basis, when the loan is in the six-month grace period after the student is no longer enrolled at least half time, or if the loan is in a deferment status. This provision eliminates the interest subsidy provided during the six-month grace period for subsidized loans for which the first disbursement is made on or after July 1, 2012, and before July 1, 2014. If you receive a subsidized loan during this time frame, you will be responsible for the interest that accrues while your loan is in the grace period. You do not have to make payments during the grace period (unless you choose to) but the interest will be added (capitalized) to the principal amount of your loan when the grace period ends. This provision does not eliminate the interest subsidy while the borrower is in school or during eligible periods of deferment.

Interest rates for subsidized loans will be tied to financial markets.

In accordance with 2013 legislation, the U.S. Department of Education will determine in June of each year the interest rates for new direct subsidized loans for the upcoming award year, which begins July 1. Current year interest rates are available at