As you learn about the different ways of financing your large investment in a college education you may hear the words subsidized and unsubsidized student loans. With the upcoming FAFSA deadline, it is important to learn the difference between the two before choosing which student loans to accept. Your eligibility for subsidized and unsubsidized student loans will be included in your financial aid award package.
Subsidized Student Loans
- Subsidized student loans are considered need based loans and are therefore awarded to students with a requirement to demonstrate financial need.
- The United States government pays for any accruing interest on a subsidized student loan. Therefore at the end of your college career you will only have to pay back the initial cost of the loan.
Unsubsidized Student Loans
- Unsubsidized student loans are not need based loans and are therefore awarded to students without a requirement to demonstrate financial need.
- The student is responsible for paying any accruing interest on an unsubsidized student loan, with interest beginning to accrue as soon as the loan is received. Therefore at the end of your college career you will have to pay back the initial cost of the loan plus the accrued interest.
