Facts of the Month

Federal Subsidized Loan Update: Change in When Interest Starts Accruing

Approximately two thirds of college students take out Federal Direct Loans.  For Subsidized Direct Loans the government pays the interest as long as the student is enrolled at least half time.  Once the student drops to under half time enrollment or graduates there is a six month grace period.  For subsidized loans disbursed on or after July 1, 2012 the student will still have a six month grace period before the first payment but interest will accrue during that grace period.

Publication Date: April 2012