What is the difference between a Subsidized and Unsubsidized Loan? 

  • A Subsidized Loan is a Federal Direct Loan for which a borrower is not generally responsible for  paying the interest while in-school, during the grace, or during the deferment period. 
  • ​​​An Unsubsidized Loan is a Federal Direct Loan for which the borrower is fully responsible for paying the interest regardless of the loan status.​​​​​