Definitions for "Subsidized Loan"
Loan based on financial need in which borrower does not pay all the interest. Usually, interest is not charged until repayment begins. See Unsubsidized Loan.
A subsidized loan is awarded on the basis of financial need. You won't be charged any interest before you begin repayment or during authorized periods of deferment. The federal government "subsidizes" the interest during these periods.
The government pays the interest on the loan while the student is in school, during the six-month grace period, and during any deferment period. Subsidized loans are awarded based on financial needs and may not be used to finance the family contribution. The Perkins Loan and the Subsidized Stafford Loan are subsidized loans.