What is the difference between an Unsubsidized Loan and a Subsidized Loan?
• Unsubsidized Loan: A Federal loan that begins accruing interest the moment it is accepted. The student may elect to pay the accruing interest while in school or have interest add to the principal loan. • Subsidized Loan: Federal loan that does not begin to accrue interest to the student until after your grace period ends, or the point when you withdraw from school. Note: The federal government pays the interest on subsidized loans while the student is in school. • The student may pay early on these loans without penalty. • Students should try to pay the interest on unsubsidized loans while in school, as it keeps their total debt lower upon graduation.
Related Questions
- What if I have exhausted my annual Federal Direct Subsidized/Unsubsidized Loan eligibility and I still have not reached the cost of attendance? How do I secure additional loans?
- What is the main difference between a Subsidized and Unsubsidized Direct Loan?
- What is the difference between a subsidized loan and unsubsidized loan?
