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

April 26, 2017loan Subsidized Unsubsidized

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

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A subsidized loan is based on the borrower’s need. The federal government pays the interest that accrues during deferments. An unsubsidized loan is not need based and the borrower is responsible for the interest, including during times of deferment.