Subsidized Vs. Unsubsidized Stafford Loans

The expense of attending college has become too much for most families to handle. Tuition alone costs thousands of dollars. Then there is also the need to buy textbooks, class supplies, student housing, meal plans – the list goes on and on. Chances are, you will need a student loan to help you pay for everything.

Anchorage Banking Rates compares student loan interest rates from various lenders and makes the comparison shopping process easier on you. The following are explanations of two variations of the Federal Stafford Loan that you may want to consider applying for:

Subsidized Federal Stafford Loan: Students that demonstrate financial need may obtain a Subsidized Stafford Loan. “Subsidized” means the government will pay the interest on the loan while the student is in school. The loan is long-term and offers low interest rates.

Unsubsidized Federal Stafford Loan: Stafford loans are also available to students who do not present a financial need or need funds in addition to other forms of financial aid. This is referred to as an Unsubsidized Stafford Loan, where the interest payments are the responsibility of the borrower.