A Federal Stafford Subsidized Loan is a great option for you if you are a financially under-privileged student. The interest accrued on these loans is paid by the federal government while you are in school. Subsidized loans are available on the basis of financial eligibility. This is determined by your school.

Eligibility for Federal Subsidized Stafford Loans:
• You need to fill the Free Application for Federal Student Aid. Your school decides whether you meet the application requirements.
• You should be carrying at least a half-time course load
• It helps if you have a good credit record.

• You should be a citizen of the U.S or a U.S national. U.S permanent residents and qualified non-citizens are also eligible.
• The school you enroll in must be a participant in this particular loan scheme.
• You should not be a defaulter on an earlier education loan.

These loans do not carry any prepayment penalty and there are several repayment options for you to select from. A freshman can avail $3500; a sophomore can get a loan of $4500, and a junior / senior can get a subsidized loan of $5500. These loan amounts are common for both independent and dependent students wishing for a subsidized loan. The interest rate on Subsidized Stafford Loans for the period July 1, 2009–June 30, 2010 is 5.6%. Additional loans above these amounts are unsubsidized.

The interest rate on subsidized loans for graduate and professional students is fixed at 6.8%. These students can avail a subsidized loan of up to $65000.
The minimum payment while repaying these loans is $50 / month. The repayment period begins six months after the course is completed or the study load is reduced to less than half-time. 10-year repayment terms are popular with students. You can opt for fixed amount payments or fluctuating amount depending upon the borrower’s financial condition.