Which of the following statements about subsidized Stafford loans is correct?

• A. Only students who demonstrate financial need are eligible for subsidized Stafford loans.
• B. Subsidized Stafford loans require no application process.
• C. Subsidized Stafford loans are available only to graduate students.
• D. Any student can qualify for a subsidized Stafford loan, regardless of financial need.

Answer: (A)

Verified step by step guidance

1. Understand the concept of subsidized Stafford loans: These are federal student loans offered to students who demonstrate financial need. The government pays the interest on these loans while the student is in school, during the grace period, and during deferment periods.
2. Review the eligibility criteria for subsidized Stafford loans: Only students who demonstrate financial need, as determined by the Free Application for Federal Student Aid (FAFSA), are eligible for these loans.
3. Clarify the application process: Subsidized Stafford loans require students to complete the FAFSA to determine their financial need and eligibility. There is no separate application process for these loans.
4. Identify the target audience for subsidized Stafford loans: These loans are available to undergraduate students who meet the financial need criteria, not exclusively to graduate students.
5. Evaluate the statement 'Any student can qualify for a subsidized Stafford loan, regardless of financial need': This is incorrect because financial need is a key eligibility requirement for subsidized Stafford loans.