Government pays interest while you’re in school

It would be nice if you could rely only on a subsidized Stafford loan to help get you through college, but unfortunately, this will most likely never be the case for any student. A subsidized Stafford loan benefits students by not requiring any part of the loan to be repaid until six months after students have graduated or stopped attending school less than part time. This means that most students need to be enrolled in at least two classes to avoid entering this deferment period.

After school Stafford interest is your responsibility

As long as students are in school at least part time the federal government pays the interest on a subsidized Stafford loan. Once the six month deferment period ends then the responsibility of making monthly payment and handling the interest falls on the shoulders of the student.

Eligibility for subsidized Stafford Loans

Applying for a subsidized Stafford loan is easy. It can be done online by filling out a FAFSA form. As long as you have a genuine need for the money you will get the loan. Once you're approved you will be required to attend a short class that most schools require, which educates you on the parameters of the loan, as well as what your responsibility is in repaying the loan. You'll also be required to attend an exit class upon graduating or leaving school.

A subsidized Stafford loan is not enough

As mentioned, most students can't put themselves through school on only a subsidized Stafford loan. The borrowing limit for subsidized loans for undergraduates is $46,000 total. Definitely not enough if you consider that this is the total amount of tuition for one year at some of the more prestigious schools. Graduate students cannot borrow more that $8,500 a year, a very miniscule sum if you consider that it cost nearly $50,000 per year to attend Stanford Law School.

Take advantage of subsidized Stafford loans

Even if you are forced to seek out other forms of financial aid, a subsidized Stafford loan should be part of your arsenal for paying for school. While you'll be forced to pay the interest on all other loans you take out, it doesn't hurt to save a little money by taking advantage of a subsidized Stafford loan.