What do subsidized and unsubsidized mean?
There are two types of Federal Direct Loans: subsidized and unsubsidized.
Direct Subsidized Loans are available to undergraduate students who show that they need money for college. If you get a Direct Subsidized Loan, the U.S. Department of Education pays any interest that accrues while you’re enrolled at least half time.
There is a time limit on how long you may receive Direct Subsidized Loans: up to 150 percent of the published length of your program. For example, if you’re enrolled in a four-year bachelor’s degree program, you can receive Direct Subsidized Loans for no more than six years. There are certain situations where you’ll become responsible for paying interest on the loan.
Direct Unsubsidized Loans are available to both undergraduate and graduate students. You do not need to show financial need to qualify. You’re responsible for paying all interest on the loan.
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