Answered By: Abigail Caraccio
Last Updated: Feb 13, 2018     Views: 138

Federal Direct Subsidized Loans are need-based loans available only to undergraduate students. The federal government pays the interest on this loan while the student is enrolled at least half time in school. The interest rate is 3.4%.

As of July 1, 2012, students will be responsible for paying any interest that accrues during their grace period.  This applies to all subsidized loans disbursed between July 1, 2012 and July 1, 2014.  If students choose not to pay the interest during their grace period, the interest will be added to their principal balance.

Both the subsidized and unsubsidized loans have a 1% loan origination fee deducted from each disbursement of the loan.

For more information on this topic, please contact The Office of Financial Aid at

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