What’s the difference between a “Subsidized” and an “Unsubsidized” Loan?

A federal subsidized student loan is considered need-based financial aid, as determined by the FAFSA. The student must have need in the financial aid package to qualify for a subsidized loan. The interest on a subsidized loan is paid by the government while the student is in school and through the six-month grace period.

An unsubsidized student loan begins accruing interest from the time the loan is disbursed. Students may pay the interest on the unsubsidized loan or let it accumulate.

Category: 
Loans