which loan provides interest subsidy

For typical U.S. federal student aid, the loan that provides an interest subsidy is the Direct Subsidized Loan (often called a “subsidized Stafford loan”).

What “interest subsidy” means

• With a Direct Subsidized Loan, the U.S. Department of Education pays the interest on your loan while you are:
  • Enrolled in school at least half‑time
  • During your grace period after leaving school
  • During certain approved deferment periods

• This means your balance does not grow from accrued interest in those times, which makes these loans cheaper than unsubsidized options.

How it differs from other federal loans

• Direct Unsubsidized Loans: Interest starts accruing from the day the loan is disbursed; if you do not pay it, it gets added (capitalized) to your principal.

• PLUS Loans (Parent PLUS and Grad PLUS): Also unsubsidized ; all interest is the borrower’s responsibility from disbursement onward.

Quick forum-style takeaway

If you are asking “which loan provides interest subsidy,” the answer, in standard U.S. federal financial aid terms, is the Direct Subsidized (Stafford) loan. Unsubsidized and PLUS loans do not come with that built‑in interest subsidy.

TL;DR: For federal student loans, only Direct Subsidized Loans provide an interest subsidy; all other common federal loans are unsubsidized and do not get that benefit.

Information gathered from public forums or data available on the internet and portrayed here.