Subsidized Vs Unsubsidized Loans

What is the main difference between a subsidized and an unsubsidized loan?

A) The loan amount

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B) Who pays the interest while you're in school

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C) The type of college you attend

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D) Whether or not you need a job

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With a subsidized loan, the federal government pays the interest while you’re enrolled in school at least half-time.

True

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False

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3. Which type of loan is based on financial need?

Subsidized loan

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Unsubsidized loan

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Both

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Neither

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Anyone can qualify for a subsidized loan, regardless of income or FAFSA results.

True

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False

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When does interest start building up on an unsubsidized loan?

After you graduate

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Six months after graduation

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Right after you accept the loan

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While you're still in school

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If you borrowed $5,000 in unsubsidized loans at a 6.53% interest rate and didn’t make any payments while in school, what would happen to the loan amount by graduation?

It stays at $5,000

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It decreases because of a discount

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It increases because interest adds up

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It disappears after you graduate

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What tool can help you estimate your monthly student loan payments after graduation?

FAFSA Calculator

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College Board Planner

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StudentAid.gov Loan Simulator

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Google Sheets

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Why might someone want to accept a subsidized loan before an unsubsidized one?

It has a better name

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You don’t have to pay it back

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Interest is covered while you’re in school

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It earns you money

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Name one way you could reduce the amount of interest you owe on an unsubsidized loan by the time you graduate.

This response will be reviewed and graded after submission.

Tue or False: Private student loans usually have lower interest rates than federal unsubsidized loans.

True

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False

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Nathan April 3, 2025

1. What is the main difference between a subsidized and an unsubsidized loan?

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3. Which type of loan is based on financial need?

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When does interest start building up on an unsubsidized loan?

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