Subsidized and Unsubsidized Loans are federal student loans from the U.S. Department of Education that are offered to
eligible students.
Fees
Both loans have the same loan fee. It is deducted from the loan at the time of disbursement. For current loan fees, visit the Federal Student Aid website.
Interest
Both loans have the same interest rate. For current interest rates, visit the Federal Student Aid website.
The main difference between these loans is when the interest begins to accumulate.
- On Subsidized Loans, you do not pay any interest until after your first six month grace period* (i.e., six months after graduation or after you drop below half-time enrollment).
*If you received a Subsidized Loan that was first disbursed between July 1, 2012 and July 1, 2014, you will be responsible for paying any interest that accrues during your grace period. If you choose not to pay the interest that accrues during your grace period, the interest will be capitalized (i.e., added to your principal balance) when you begin repayment. If you receive a Federal Direct Subsidized Loan that is first disbursed on or after July 1, 2014, it will be eligible for the interest subsidy during your grace period.
- On Unsubsidized Loans, the interest begins to accumulate when the loan disburses, while you are in school. Interest-only payments are due each quarter (i.e., every three months). If you decide not to make the quarterly interest payment while in school, the unpaid interest will be capitalized. If you want to pay the interest while attending school, contact your loan servicer. Find your loan servicer by visiting National Student Loan Data System. You will need your FSA ID to log in to NSLDS.
Repayment
You do not begin repayment on your Subsidized and Unsubsidized Loans until six months after you graduate or drop below half-time status (i.e., 5 or less credit hours for undergraduates; 4 or less credit hours for graduates).
Need additional help? Access 24/7 live chat, create a case from My ASU Service Center or call 855-278-5080.
