<p>I’m not a pro and can’t believe I’m trying to give advice to ‘taxguy’, but it means the interest that accumulates (quarterly, I think) gets added to the loan amount (or your could pay it) so your debt builds. With a subsidized loan, the interest is paid by the government until the student graduates. </p>
<p>I think every full time student is eligible for a Stafford loan. In order to be offered the subsidized version, you have to qualify. When my s. applied to colleges, he was offered a subsidized loan at his college. We asked them to reconsider the aid package and they gave him a small grant and an unsubsidized Stafford loan. We have paid the interest (a statement comes periodically) even though it’s not ‘due’, they’re just informing him. We are in effect subsidizing his Stafford loan.</p>
<p>I’m not sure if it’s snow in the winter - when s. started school, the interest rate on Stafford loans was very low. Although rates have risen (there’s a whole thing about ‘consolidating loans’ that I confess I’ve never bothered to look into and don’t know who is eligible) I think Stafford’s are still better than Plus loans. No debt is best of all.</p>