Subsidized and unsubsidized loans are essentially the same, expect for the duration of eligibility and when interest is charged to the student.

Recipients for subsidized loans must demonstrate a financial need, while those granted unsubsidized loans do not. Subsidized loans begin accruing interest at the date of loan disbursement, but the federal government pays for the interest while a student is enrolled at least part time in a post-secondary education program. Unsubsidized loans also begin accruing interest at the date of loan disbursement, but the federal government does not cover this cost. Instead, the interest accrues until the loan is paid in full by the student. Students utilizing unsubsidized loans may choose to capitalize interest. Both subsidized and unsubsidized loans provide a six-month grace period before repayment begins following a student’s graduation.