What is the difference between Subsidized and Unsubsidized Federal Student Loans?
A subsidized loan is awarded based upon need. The federal government pays the interest on the loan while the student is in school. Only after leaving school does interest begin to accrue to the student. An unsubsidized loan is not based on need. Instead, the limits are determined by your grade level and the cost of education minus other aid. Interest begins immediately, and the student can elect to pay it as it accrues or have it added to the loan principal to be paid when the loan goes into repayment.
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