The U.S. Department of Education offers low-interest loans to eligible students to help cover the cost of college or career school. 
Students may be eligible to receive subsidized and unsubsidized loans based on their financial need. Subsidized and unsubsidized loans are federal student loans for eligible students to help cover the cost of higher education at a four - year college or university, community college, or trade, career, or technical school. The U.S. Department of Education offers eligible students at participating schools Direct Subsidized Loans and Direct Unsubsidized Loans. Some people refer to these loans as Stafford Loans or Direct Stafford Loans. 

What s the difference between Direct Subsidized Loans and Direct Unsubsidized Loans? 
In short , Direct Subsidized Loans have slightly better terms to help out students with financial need. Here s a quick overview of Direct Subsidized Loans : Direct Subsidized Loans are available to undergraduate students with financial need. Your school determines the amount you can borrow , and the amount may not exceed your financial need. The U.S. Department of Education pays the interest on a Direct Subsidized Loan while you re in school at least half - time , for the first six months after you leave school referred to as a grace period * , and during a period of deferment a postponement of loan payments. *Note: If you received a Direct Subsidized Loan that was first disbursed between July 1 , 2012, and July 1 , 2014 , you will be responsible for paying any interest that accrues during your grace period. If you choose not to pay the interest that accrues during your grace period , the interest will be added to your principal balance. Here s a quick overview of Direct Unsubsidized Loans : Direct Unsubsidized Loans are available to undergraduate and graduate students ; there is no requirement to demonstrate financial need. Your school determines the amount you can borrow based on your cost of attendance and other fin

user: What type of loans does the U.S. Department of Education offer students?

assistant: The U.S. Department of Education offers low-interest loans to eligible students. Students may be eligible to receive subsidized and unsubsidized loans based on their financial need.

user: Are interest rates on loans fixed for the life of the loan?

assistant: Some are. You can find out how interest is calculated on the website.

user: What are the requirements to be eligible for a Direct Subsidized Loan?

assistant: You must be enrolled at least half-time at a school that participates in the Direct Loan Program. You must also be enrolled in a program that leads to a degree or certificate awarded by the school. Direct Subsidized Loans are available only to undergraduate students who need financial aid.

user: Is there something else that I need to do in order to receive my loan?

assistant: If your financial aid package includes a federal student loan your school or college will tell you haw to accept the loan.

user: Thank you I will contact my college.

assistant: Yes that is the best thing to do.

user: I am an undergraduate student, does this allow me to apply for a Direct Subsidized Loan?

assistant: Yes as an undergraduate you can apply for either a Direct Subsidized Loan or a Direct Unsubsidized Loan.