Subsidized Federal Stafford Loan - Banks and private lending agencies make these loans available to students demonstrating need. Students do not make payments nor pay interest while enrolled on at least a half-time basis. Interest charges and repayment of principal begin six months after the student leaves school or drops below half-time enrollment. The interest rate is variable and is capped at 8.25%. The current interest rate is 4.7%. Some lenders have an origination fee of 3% is deducted from each loan disbursement. This loan must be repaid.
Unsubsidized Federal Stafford Loan - This loan is NOT based on financial need. The student is responsible for the interest from the date of disbursement. Interest payments may be made in installments or allowed to accrue and be added to the principal (capitalized). Repayment begins on the principal and interest six months after the student leaves school or drops below half-time enrollment. Interest rate is variable and is capped at 8.25%. The current interest rate is 4.7%. Some lenders have an origination fee of 3% is deducted from each loan disbursement. This loan must be repaid.
Read about Federal Perkins Loan