What’s the Difference Between Subsidized and Unsubsidized Student Loans?

There are two main types of student loans: subsidized and unsubsidized. Subsidized loans are need-based, meaning the government pays the interest while you're in school. Unsubsidized loans are not need-based, so you're responsible for the interest while you're in school.

The biggest difference between subsidized and unsubsidized student loans is who is responsible for paying the interest. With a subsidized loan, the government pays the interest while you're in school. With an unsubsidized loan, you're responsible for the interest from the time the loan is disbursed until it's paid in full.

Another difference is that subsidized loans have a lower interest rate than unsubsidized loans.

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