Subsidized vs Unsubsidized Loans

Subsidized and unsubsidized loans are types of student loans. With subsidized loans, the government pays the interest while you're in school at least half-time, so the debt doesn't grow during that period. Unsubsidized loans, however, accrue interest from the moment they’re borrowed, including while you're in school. This means that if you don’t pay the interest during school on unsubsidized loans, it gets added to the total amount you owe when you graduate. Subsidized loans are need-based, whereas unsubsidized loans are available to most students regardless of financial need.