How to Get a Subsidized Loan

The federal government offers two types of subsidized student loans to qualifying applicants: Perkins loans and subsidized Stafford loans. If you receive a subsidized loan, the federal government pays all of the interest that accrues on the loan balance while you are in school, during the grace period right after you leave school and during any times in the future when you defer payments on your loan. This adds up to significant savings because your loan balance does not increase during the times when you are not making payments. Apply for a subsidized loan through the federal government.

Gather your tax return and W-2 forms from last year and your current account statements for your bank account and investment accounts. If you are a dependent student, your parents need to provide all of these forms as well.

Go to the website for the Free Application for Federal Student Aid (see Resources).

Fill out the FAFSA with your personal information and your parents' information if needed. Subsidized loans are awarded on the basis of financial need, so the application asks about your income and assets to determine whether you qualify for them.

Add the school code for your college or university to your application using the school code search tool in the application. If you are not yet enrolled, add the code for each school to which you are applying to send the FAFSA to all of their financial aid offices.

Go to the personal identification number (PIN) website (see Resources) and request a PIN, which you will use to electronically sign your FAFSA. If your parents provided financial information, they will need to sign up for a PIN as well.

Submit your application as soon as possible after Jan. 1 of the calendar year in which the school year begins. If you will need the financial aid in the fall of 2012, apply as soon as possible after Jan. 1, 2012. Applying early gives you the best chance of receiving need-based financial aid, including subsidized loans, before the funds run out.

Call the financial aid office at the school you attend or the schools you are applying to and ask if they require any other forms to apply for financial aid. Fill out all required forms.

Read the financial aid award letter your school sends you. Accept all subsidized loans, and return a signed copy of the award letter to the financial aid office.


  • Not all students who apply for subsidized loans receive them. This is because the federal government awards them to students who it determines to have significant financial need. Even if you do not receive subsidized loans, you can still borrow money for school with unsubsidized government loans.


  • Stafford loans come in both subsidized and unsubsidized forms. With an unsubsidized Stafford loan, interest accrues on your balance as soon as you borrow the money. Pay attention to which you are being offered when you evaluate the financial aid award your school gives you.