Subsidized Loan


Subsidized Loan

Subsidized Loan

A subsidized loan is considered to be a federal student loan for eligible college students to help with the costs of tuition, books, and living expenses at a community college, four year college, and a trade or technical school. The U.S Department of Education can offer eligible college students access to obtaining a direct subsidized loan. A subsidized loan is also a loan that the federal government will pay the interest on during the time a student is attending college at least half-time. A subsidized loan is usually reserved for those students that demonstrate a financial need throughout their college education.


There are some pros and cons that you will need to look at with regards to a subsidized loan. A few pros for a subsidized loan are the government will pay the interest as long as you are in school half-time, the government will also pay the interest if you need to defer the subsidized loan, it can offer a maximum of $23,000 upon graduation, and no payments are owed until 6 months after you graduate or stop going to school at least half-time. A few cons of a subsidized loan are you can only borrow a certain amount of money that is based on the grade that you are in school, the loan fees are automatically deducted from each disbursement, and the loans amounts for both a subsidized and unsubsidized loan cannot go over certain limits.