Direct Loans: Offered by the federal government or a third-party lender, Stafford Loans can be subsidized or unsubsidized.
- Subsidized loans The Department of Education pays the interest:
- While you are enrolled at least half time
- First six months after you leave school (grace period)
- During a period of deferment
- Unsubsidized loans You are responsible for paying interest on this loan during all periods. Students may choose to pay interest while attending school so that it doesn’t increase the principal balance.
The interest rate for undergraduate students whose subsidized or unsubsidized Direct Loan is disbursed on or after July 1, 2020 through July 1, 2021 is fixed at 3.73%. Any loan with a first disbursement date on or after Oct. 1, 2020 and before Oct. 1, 2021 has a loan fee of 1.057%.