The Subsidized Federal Stafford Loan is a low-interest guaranteed loan designed to help students pay for their education cost. Qualification depends on financial need. The federal government (Department of Education) will pay the interest for you while you are in school and during your grace period.

     Further, if the borrower, while in repayment, should need to take out a deferment such as an unemployment deferment or because of a return to school (in-school deferment), the government would pay the interest during those periods, as well.

     There are many reasons a student might qualify for a subsidized student loan. One might be if a student's parents' financial means are far less than what is required to cover their child's education. However, it is important to note that the FAFSA must be completed before receiving a Stafford loan. The federal government uses a universal formula to calculate a family's financial ability to assist in paying for their child's education, which is the FAFSA EFC score that is sent to all FAFSA applicants. A student wouldn't be eligible to receive subsidized student loans simply because their parents refused to pay for a specific college for one reason or another (i.e., location, size, program options, religious affiliation, etc.). This student would have to find other options to pay for college such as college scholarships and/or taking out a private student loan.