Are Grad Students Eligible for Subsidized Student Loans?

If you’re a grad student, you might be wondering if you’re eligible for subsidized student loans. The short answer is no, graduate students are not eligible for federal subsidized student loans. But that doesn’t mean you don’t have options.

What are Subsidized Student Loans? 

The main difference between a subsidized and unsubsidized student loan is that the terms for a subsidized loan are slightly better for students.

With a subsidized loan, the U.S. Department of Education pays the interest:

  • While you’re attending school at half-time status or more
  • During the six months post-graduation
  • During any period of deferment

The amount of the loan is determined by financial need and subsidized loans are sought after due to the fact that students don’t pay interest while in school. 

Can Grad Students Get Subsidized Student Loans?

No, as of July 1, 2012, grad students are no longer eligible for subsidized student loans. However, graduate and professional students may be eligible for Direct Unsubsidized Loans, which offer slightly better repayment and interest options that your typical private loans. 

What is a Direct Unsubsidized Student Loan? 

An unsubsidized loan is simply a federal student loan in which the student is responsible for paying the interest as soon as it is dispersed. You do not need to demonstrate financial need and schools will award you this loan based on your cost of attendance and any additional financial aid you might receive.

Federal student loans generally come with benefits that private loans do not have — including better repayment options and, in some cases, loan forgiveness. That’s why many students prefer to take out federal loans first. 


To learn more about federal student loans, check out our post here

You can apply for federal student loans through the FAFSA. At FRANK, we offer a free, simplified application that can complete in just minutes. File today!