The following is a message from Maureen McFarlane, Director of FInancial Aid. Please share with students.
Direct Subsidized Loans are not eligible for an interest subsidy during the six-month grace period.
Subsidized loans are loans for which the borrower is not responsible for the interest while the student is enrolled in college on at least a half-time basis, when the loan is in the six-month grace period after the student is no longer enrolled at least half-time, or if the loan is in a deferment status. The interest subsidy is no longer available during the six-month grace period for subsidized loans for which the first disbursement is made on or after July 1, 2012, and before July 1, 2014. If you receive a subsidized loan during this timeframe, you are responsible for the interest that accrues while your loan is in the grace period. You do not have to make payments during the grace period (unless you choose to), but the interest will be capitalized (added to the principal amount of your loan) when the grace period ends. This provision does not eliminate the interest subsidy while the borrower is in school or during eligible periods of deferment.
Subsidized loans for which the first disbursement is made on or after July 1, 2012, and before July 1, 2013, have a 3.4% fixed interest rate. After July 1, 2013 the interest will be 6.8 %.