Question

I know that my student loans are funds that have to be repaid once I graduate. But what's all this about about "subsidized" and "unsubsidized" loans? What's the difference?

Answer

OK!  You're on the right track with the idea of what loans do to fund your college education, but the financial language can be confusing.  You know that loans for school do come with a few conditions, one of which is interest for borrowing the money, which accumulates.  Subsidized loans are government-assisted, so to speak.  While you are in school, the government takes care of the interest that is being added to the amount of your loan.  Unsubsidized loans go without receiving government help, and interest builds during the lifetime of the loan, unless you pay it down during school.

Categories: Financial Aid | Student Loans
Tags: student loans subsidized loan unsubsidized loan

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