Student Loans : How to Compare Unsubsidized vs. Subsidized Student Loans
Hello, I’m Cheri Ashwood. I’m a guidance counselor,
and today I’m going to tell you how to compare unsubsidized and subsidized student loans.
The difference between unsubsidized and subsidized loan is that an unsubsidized loan is where
the borrower, or the student, is responsible for repayment of the interest, or the interest
accrues from the time that you awarded the loan. That means that when you are awarded
the loan on Monday, on Monday it starts to build interest, and you are responsible for
that interest. On a subsidized loan, the interest does not begin to accrue until separation
from school. That can mean graduation, or at any point in time that you fail to be a
full time student. You either separate from school completely, or drop below the required
number of credit hours to be a full time student. With an unsubsidized student loan, you can
begin to pay that interest at any time, a little bit at a time, or as much as is possible.
If you can’t repay it until graduation, upon the point where you gain employment, that’s
fine. But that interest will accrue. On a subsidized loan, you don’t even have to think
about interest until the time that you separate from school. I’m Cheri Ashwood. I’m a guidance
counselor, and your future starts today.