Subsidized vs. Unsubsidized Loan

Seeking Advice
1

Hey everyone, I’m starting the college application process and filling out the FAFSA is making my head spin. I keep seeing terms like “subsidized loans” and “unsubsidized loans” thrown around, but I’m not entirely sure what the difference is. Should I be applying for both? Is one better than the other? I’m hoping to minimize the amount I have to borrow, so any insights would be greatly appreciated.

Thanks in advance,

1 Like
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Hey @Emma ,

I know how overwhelming FAFSA can be! Here’s a quick difference:

  • Subsidized Loans: Need-based; the government pays the interest while you’re in school, so your balance doesn’t grow.
  • Unsubsidized Loans: Not need-based; you’re responsible for all interest, even while in school.

It’s usually better to accept subsidized loans first to minimize borrowing costs. You can apply for both but prioritize subsidized loans.