The two most common government-sponsored education (FFELP) loans are Stafford loans and PLUS loans. Stafford loans are given to students. The interest rate for Stafford loans is capped at 8.25 percent. There are strict limits on amounts that can be borrowed through this program. There are two types of Stafford loans: Subsidized and Unsubsidized.
Subsidizeed Stafford loans are available to students who meet a financial needs test. The federal government pays the interest on a subsidized Stafford loan while the borrower is enrolled in school, during grace periods and or during qualified deferment periods.