- name: subsidized Stafford Loan
- interest rate: 6.8%
- interest type: subsidized
- maximum repayment term: 10 years
- grace period: 6 months
- maximum loan amount: $8,500 per year ($65,500 total)
Advantages of Subsidized Stafford
The interest rate is a bit higher than the previous two loans. While this loan is not as good as the Perkins Loan, it is still pretty good. Any loan with subsidized interest is pretty good in my book. There is also a grace period, but it is only 6 months.
Disadvantages of Subsidized Stafford
The downside is that you can only get a maximum of $8,500 per school year, and the loan total cannot exceed $65,500. Similar to the Primary Care Loan, this is a needs-based loan. You will most likely qualify as a poor medical student. And the financial status of your parents is not taken into consideration.
Who Should Take Out the Loan?
So is it for you? Absolutely. If you max out on the Perkins Loan and need additional money, this is the next best option. Remember, it is subsidized, so the loan is interest free until after your grace period. And if you pay it off in full before the grace period is up, you did not lose anything and got free use out of the government’s money.
Future of the Loan
For the school year of 2012 – 2013 and onwards, this could be a loan of the past, which means that it will no longer be offered. My school recently sent the following e-mail out:
Effective for loans made for periods of enrollment (loan periods) beginning on or after July 1, 2012, graduate and professional students are no longer eligible to receive Federal Direct Subsidized Loans. The terms and conditions of Direct Subsidized Loans received by any student for loan periods beginning before July 1, 2012, for either graduate or undergraduate study, are not affected by this change.
Find out how this will affect the cost of your education going forward at the no more Subsidized Stafford Loans section.
This is going to be a big loss for medical school students. I really hope the government comes out with a replacement for the subsidized Stafford loan.
This article is part of the Medical School Loans series. Click on the link if you want more tips and hints about borrowing money smartly.