What are the differences between subsidized and unsubsidized student loans?

In Washington, student loans come in two forms: subsidized and unsubsidized. Subsidized student loans are those in which the government pays the interest on the loan while the student is enrolled in school. Unsubsidized student loans are those in which the student is responsible for the interest, both while in school and after graduation. Subsidized loans are typically the better option for students. This is because with a subsidized loan, the interest is abated while the student is enrolled, and those interest payments do not have to be made until the student graduates and begins repayment. Unsubsidized loans, on the other hand, require the interest to be paid while the student is enrolled in school. This means that the outstanding principal amount will be larger than with a subsidized loan, as it will include any interest accrued during the student’s enrollment. In addition, subsidized loans are available only to students who demonstrate financial need, whereas unsubsidized loans are open to all students regardless of financial need. Subsidized loans are also available for a longer period of time: the maximum period for repayment for subsidized loans is 10 years, whereas it is 20 years for unsubsidized loans. Overall, subsidized student loans are a better option for students in Washington due to their more favorable terms. They are available to students with demonstrated financial need and require no payments during the student’s enrollment. Furthermore, they offer a longer period of repayment than unsubsidized loans.

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What are the differences between subsidized and unsubsidized student loans?

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