What is the difference between subsidized and unsubsidized student loans?
The subsidized loan is based on financial need as determined by the Free Application for Federal Student Aid (FAFSA). The federal government pays the interest while you are in school, during your grace period, and during any authorized deferment periods. The unsubsidized loan is not based on need, which means students at any income level can qualify. Interest will accrue while in school, during your grace period, and during any authorized deferment periods. The student has the option of paying the interest during these times.
