A subsidized student loan is a type of federal student loan available to undergraduate students who demonstrate financial need. The U.S. Department of Education pays the interest on the loan while the student is in school at least half-time, during periods of deferment, and during the grace period after the student leaves school. This means that the student is not responsible for paying the interest on the loan during these periods. The loan repayment starts six months after the student graduates, leaves school, or drops below half-time enrollment status.

In contrast, an unsubsidized student loan is available to both undergraduate and graduate students and is not based on financial need. Interest is charged during in-school, deferment, and grace periods, and the student is responsible for paying the interest from the time the loan is disbursed until it is paid in full.

To apply for a subsidized or unsubsidized loan, students must complete the Free Application for Federal Student Aid (FAFSA) . The amount of money a student can borrow depends on their year in school, their dependency status, and other factors.

In summary, a subsidized student loan is a type of federal student loan that is available to undergraduate students who demonstrate financial need. The U.S. Department of Education pays the interest on the loan while the student is in school at least half-time, during periods of deferment, and during the grace period after the student leaves school. In contrast, an unsubsidized student loan is available to both undergraduate and graduate students and is not based on financial need. The student ...