The difference between subsidized loan and a unsubsidized loan?
In the case of student loans, to say that a loan is “subsidized” means that someone is paying the interest on the loan during a given period of time. With Federal Stafford and Perkins loans, the government subsidizes this interest. NOTE: It should be emphasized that a Subsidized Stafford Loan is only really subsidized *while you are in school* and during any periods of deferment/grace (i.e. if you apply for and are approved for an Economic Hardship Deferment once you enter repayment, your loan won’t accrue interest during the deferment period). ANy other time, it will accrue interest which you must pay off. If your loan is UNsubsidized, that means that the government does NOT cover the accruing interest at any time. For example, if you borrow a $2,500 Unsub loan during your Freshman year, the loan will have accrued interest while you are in school such that, by the time you graduate, the amount you owe will be more like $2,750 (assuming the current Stafford interest rate of 4.7% — tho
