What is the difference between subsidized and unsubsidized loans?

In regards to student loans what is the difference in subsidized and unsubsidized loans?

  • Answer:

    Subsidized loans are based on financial need and the interest is paid by the government as long as the student is enrolled in school. Unsubsidized loans are not based on financial need and all students qualify no matter how much you make. The government does not pay the interest while you are in school, but you can have them deferred until 6 months after you graduate.

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Other answers

Subsidized loans are interest free until you get out of school. Unsubsidized loans gather interest, even while you are school. So subsidized loans are better than unsubsidized.

Mr. Taco

On subsidized loans the interest is paid by the federal government while you are in school. On Unsubsidized you have a choice of paying it as it accrues or letting it capitalize into the loan.

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