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KNOWLEDGE BASE

What's the difference between subsidized and unsubsidized student loans?

Subsidized Loans

These loans have the benefit of interest being paid for while the student is in college or the loan is in deferment. The U.S. Department of Education pays this interest if:

  • The student is in school at least half-time
  • It's within the first six months after the student leaves school
  • The loan is in deferment

Unsubsidized Loans

These loans start accruing interest as soon as they're taken out. This means the student is responsible for paying the interest during all periods. If the interest isn't paid for, it will accrue and be added to the principal balance.

For more information visit studentaid.gov