Question on Federal Direct Subsidized Student Loan

[Canoon]

In Federal Student Loan Programs, it states: student is not usually charged interest on the loan during certain periods but still shows the interest rate for this loan. Can anyone with the experience explain what that mean? Does it mean the interest are not charged to students when they study in schools and the interest will be charged after they have jobs?

[thumper1]

Yes. It means the interest rate is what you will be charged if you leave school.

[4kidsdad]

The Direct Loans always accrue interest, but US DOE pays the interest on your Direct Subsudized Loan while you’re in school at least half-time. For details, see http://studentaid.ed.gov/sa/types/loans/subsidized-unsubsidized#when-repay

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).