 TITLE: What Are the Different Types of Federal Student Loans? CONTENT: Federal Direct Unsubsidized Loans\n---------------------------------\nUnlike with subsidized loans, you don't need to prove financial need for direct unsubsidized loans. They have higher borrowing limits than subsidized loans, but interest accrues the entire time you're in school instead of being paid for by the government. If you don't pay off the accumulated interest by the time you finish school, it's all added to your principal balance—so you start paying interest on your interest. The best way to avoid that is to pay all your accrued interest before your first loan payment is due. If you're eligible, opt for subsidized loans first, then take out additional unsubsidized loans as necessary.\n*   **Who is eligible**: Undergraduate, graduate and professional students; you do not need to prove financial need.\n*   **Rates and fees**: The interest rate on federal direct unsubsidized loans for the 2020-2021 school year is 2.75% for undergraduates and 4.30% for graduate and professional students. The loan fee, which is deducted prior to loan disbursement, is 1.057% for student loans disbursed before October 1, 2021. END