Difference Between Subsidized and Unsubsidized Loans

Subsidized loans:

  • Are awarded on the basis of financial need
  • Have no interest that  accrues on the loan during half-time enrollment and during  authorized periods of deferment
  • Beginning in 2017-2018, subsidized loans have an interest rate of 4.45% (restricted to undergraduates and are not available to graduate students)

Unsubsidized loans:

  • Are not awarded on the basis of financial need
  • Have interest that accrues during half-time enrollment and during authorized periods of deferment
  • Do not require payment on interest but students will receive a quarterly statement showing the amount of interest during each quarter.  It is recommended that students pay all or at least part of their quarterly interest.
  • Have an interest rate of 4.45% for undergraduates (same as subsidized loan) and 6.0% for graduate students.