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

When it comes to financing a college education, student loans are often the go-to option for many students. Yet understanding the differences between subsidized and unsubsidized student loans is essential before applying for either type of loan. So what’s the difference?

Subsidized student loans are offered by the federal government and are available to undergraduate students who demonstrate financial need. Interest does not accrue on these loans while you're in school, making them a preferred option amongst students who need help paying for college expenses. Unsubsidized student loans, on the other hand, do accrue interest from the time they are taken out; however, unlike subsidized student loans they don’t require proof of financial need in order to qualify. Both types of federal student loan offer flexible repayment options and may be deferred or canceled under certain circumstances.

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