 TITLE: What’s the Difference Between Subsidized and Unsubsidized Student Loans? CONTENT: Amount You Can Borrow\n---------------------\nThe U.S. Department of Education limits the dollar amount of subsidized and unsubsidized loans you can get each academic year (annual loan limits). They also limit the total amount you can borrow over your graduate or undergraduate career (aggregate loan limits). The limits vary based on your class status—that is, whether you're a freshman, junior and so on—whether your parents claim you as a dependent on their tax return, and whether or not your parents are eligible for a direct PLUS loan.\nCurrently, dependent students whose parents aren't eligible for direct PLUS loans are limited to borrowing an aggregate of $31,000 in subsidized and unsubsidized student loans over four years of college; only $23,000 of that amount can be in subsidized loans. Check out the U.S. Department of Education website to get the complete details on annual and aggregate loan limits and see what you may be qualified to borrow.\n### Qualifications for Borrowers\nApplying for both subsidized and unsubsidized loans is easy—all you have to do is fill out the Free Application for Federal Student Aid (FAFSA). Based on your application, your school will tell you what type and amount of loans you qualify for. Often, it's a combination of different types of loans.\n*   **Financial need qualifications**: Subsidized student loans are offered based on financial need. Unsubsidized loans don't require you to prove financial need. Often, unsubsidized loans are offered to supplement subsidized loans. If your family income is too high to qualify you for need-based loans or financial assistance, an unsubsidized loan can be a good option.\n*   **Degree program qualifications**: Subsidized loans are available to undergraduates only. Unsubsidized loans are available for undergraduate, graduate and professional school students.\n### Repayment\nOnce you start making your student loan repayments, you might be lucky enough to have some extra money you can put toward your loan payments. If so, which loans should you prioritize? In general, it's best to repay the loan with the highest interest rate first. However, if you have an unsubsidized student loan and you weren't able to pay the interest during school, it's a good idea to put any extra money toward that loan first. Why? Remember, any unpaid interest that accrued during your school years gets added to your loan principal, so you're now paying interest on the original principal plus all the accrued interest. Ouch! END