what is a direct subsidized loan

A Direct Subsidized Loan is a type of federal student loan that is made through the William D. Ford Federal Direct Loan Program. It is a low-interest loan available to eligible undergraduate students who demonstrate financial need. The U.S. Department of Education pays the interest on the loan while the student is enrolled in school at least half-time, during the grace period, and during deferment periods. The repayment amount includes the original amount of the loan and the interest that starts to accrue from the moment the student leaves school. Subsidized loans are only available to undergraduates, and there is usually a lower loan limit than with an unsubsidized one. If a student qualifies for a subsidized loan, it is generally recommended to take that financial aid, since it will save them money.