Answer: The subordinate clause in the sentence is "who are loyal and industrious" and it is used as an adjective.
Explanation: A subordinate clause is a clause that cannot stand alone as a sentence because it does not express a full thought. Moreover, there are three types of subordinate clauses: noun clauses, adjective clauses and adverbial clauses.<u> In the sentence provided, the subordinate clause is "who are loyal and industrious", which has been introduced by the relative pronoun "who"</u>. Furthermore, it is an adjective clause since <u>it is being used as an adjective: "who are loyal and industrious" is describing a noun, that is to say the antecedent "students".</u>