How to Compare Unsubsidized vs. Subsidized Student Loans

Hello, I’m Cherry 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 loans is that an unsubsidized loan is where the borrower or the student is responsible for repayment of the interest, of the interest accrues from the time that you are awarded the loan. That means when you are awarded of 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 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 Cherry Ashwood. I’m a guidance counselor. And your future starts today.