Subsidized Loan

A subsidized loan is a type of student loan in which the government pays the interest while the borrower is in school at least half-time, during the grace period, and during any deferment periods. This type of loan is typically offered to students who demonstrate financial need. By covering the interest during certain times, subsidized loans help students reduce the overall cost of borrowing and the total repayment amount after graduation. These loans are generally available through federal student aid programs and come with a fixed interest rate.