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What is the difference between a federal subsidized loan and an unsubsidized loan?

April 26, 2017difference Federal loan Subsidized Unsubsidized

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What is the difference between a federal subsidized loan and an unsubsidized loan?

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Both types of loans are federally guaranteed loans, but with a subsidized loan, the federal government pays the interest while you are enrolled in school at least half-time or during other approved deferment periods. An unsubsidized loan begins accumulating interest from the time the loan is disbursed. Students have the option of paying the unsubsidized interest before they enter repayment or the interest will be capitalized.