A subsidized loan is awarded on the basis of financial need.

The federal government pays the interest on the loan while the borrower is enrolled in at least a half-time basis and during the repayment grace period.

Students must begin repaying this loan 6 months after you cease to be enrolled at least half-time. The interest rate on subsidized Stafford Loans for undergraduate students that are first disbursed July 1, 2012 - June 30, 2013 is 3.4% for undergraduate students. Graduate students are not eligible for subsidized loans.