What is the difference between subsidized and unsubsidized loans?

*Note: If you received a Direct Subsidized Loan that was first disbursed between July 1, 2012, and July 1, 2014, you will be responsible for paying any interest that accrues during your grace period. read more

Subsidized and unsubsidized loans are federal student loans for eligible students to help cover the cost of higher education at a four-year college or university, community college, or trade, career, or technical school. read more

Understanding the difference between subsidized loans and unsubsidized loans is essential because it can change how your student loan interest works, the amount you pay, and how you decide to tackle student loan repayment. read more

Federal subsidized and unsubsidized direct federal loans for undergraduates carry the same low, fixed interest rate, so it is generally a good idea to take out a subsidized loan before taking on additional debt with an unsubsidized loan. read more