A subsidized Direct Stafford loan is a loan from the Department of Education to students who can demonstrate financial need. The interest for the subsidized loan is paid or subsidized by the Department of Education, while you are in school at least 1/2 time. The government has eliminated the subsidy during the six month grace period after graduation or when students are no longer enrolled at least half-time so that the student will incrue interest during this six month grace period. This is effective for new Direct Subsidized Loans disbursed on or after July 1, 2012.
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