 TITLE: What Is an Unsubsidized Student Loan? CONTENT: What Is the Difference Between Subsidized and Unsubsidized Loans?\n-----------------------------------------------------------------\nFederal student loans, unlike private loans, are either subsidized or unsubsidized by the federal government. So what's the difference?\nSubsidized loans are available to undergraduate students only, and the government reserves them for students who demonstrate financial need. The U.S. Department of Education offers the best terms on these loans, paying the interest while you're attending school at least half time, during the six-month grace period after leaving school, and during any loan deferment periods.\nUnsubsidized loans, on the other hand, can be obtained by both undergraduate and graduate students and don't require demonstration of financial need. Interest accrues on unsubsidized loans while you are attending school, during the grace period and during deferment. If you do not pay the accrued interest before you must start paying back the loan, that interest gets added to the loan's total. END