The fed­er­al gov­ern­ment pays the inter­est on sub­si­dized Stafford Loans while the stu­dent is in school, dur­ing the six-month grace peri­od after grad­u­a­tion, and dur­ing any loan defer­ment peri­ods. With unsub­si­dized Stafford Loans, the stu­dent pays the inter­est dur­ing these peri­ods. Eli­gi­bil­i­ty for sub­si­dized Stafford Loans is based on finan­cial need, as deter­mined by the fed­er­al gov­ern­men­t’s finan­cial aid appli­ca­tion, the FAFSA. Grad­u­ate stu­dents aren’t eli­gi­ble for sub­si­dized Stafford Loans.

Each year, thou­sands of stu­dents take out fed­er­al loans to help pay for col­lege or grad­u­ate school. The inter­est rates on fed­er­al stu­dent loans are fixed for the life of the loan but reset each year on July 1 for new loans. This year, there’s some good news for stu­dents and par­ents. Rates on new loans issued dur­ing this aca­d­e­m­ic year–July 1, 2015, through June 30, 2016–are slight­ly low­er than they were for the 2014/2015 aca­d­e­m­ic year.

Key Details:

Federal Student Loans

 

 

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