What are the differences between subsidized and unsubsidized student loans?

In Kansas, the differences between subsidized and unsubsidized student loans are important when considering how to fund an education. Subsidized student loans are those that are provided through the government and are based on financial need. The government pays the interest on the loan while the student is still in school or during deferment periods. Unsubsidized student loans are provided through the government but do not require proof of financial need. With an unsubsidized student loan, the borrower is responsible for paying the interest while in school and during periods of deferment. Subsidized student loans can be a great advantage for those with financial need, since it not only reduces the amount the borrower needs to pay, but also keeps the amount of interest they will need to pay to a minimum. Unsubsidized loans, however, can also help those who don’t qualify for subsidized student loans, as well as those who still can’t cover the cost of tuition after applying for the subsidized loan. In terms of repayment, the differences between subsidized and unsubsidized loans remain the same. Borrowers from either loan type will need to pay back the principal amount borrowed, plus any interest that accrues while the loan is in repayment. The major difference, however, is that those with subsidized student loans may be eligible to receive loan deferment and forbearance programs, allowing them to temporarily postpone or reduce their payments if they meet certain criteria. Those with unsubsidized loans do not receive this benefit.

What are the differences between subsidized and unsubsidized student loans?

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