Subsidized vs Unsubsidized
The are two main differences between the Subsidized Direct Loan and the Unsubsidized Direct Loan: Interest Rate and Subsidy. The federal government pays for the interest on the Subsidized Direct Loan while a student is enrolled at least half-time. Interest on the Unsubsidized Direct Loan accrues from the time the money disburses on the student's account to the time the loan is repaid. The difference in interest rate is outlined below.
The Budget Control Act of 2011 eliminates the interest subsidy for Federal Direct/Stafford Loans made to graduate and professional students for periods of enrollment beginning on or after July 1, 2012.
Direct LoanDisbursement Date |
SubsidizedInterest Rate |
UnsubsidizedInterest Rate |
|
July 1, 2012 to June 30, 2013 |
6.8% |
6.8% |
|
July 1, 2011 to June 30, 2012 |
3.4% |
6.8% |
|
July 1, 2010 to June 30, 2011 |
4.5% |
6.8% |
|
July 1, 2009 to June 30, 2010 |
5.6% |
6.8% |
|
July 1, 2008 to June 30, 2009 |
6.0% |
6.8% |
|
July 1, 2006 to June 30, 2008 |
6.8% |
6.8% |