Subsidized vs. unsubsidized student loans: What’s the difference?
“Unsubsidized loans accrue interest from the day they are disbursed to the school and during all other periods regardless of loan status,” says Betsy Mayotte, president and founder of the Institute of Student Loan Advisors (TISLA), a 501(c)(3) that offers advice and resources for students. “For those reasons, subsidized loans are often less expensive over the long run for student loan borrowers, as they at least don’t have to contend with the interest that accrued while they are in school.”