What is a subsidized loan?

For all subsidized federal student loans, the U.S. Department of Education subsidizes - pays the interest on - your loan while you are in school and during periods of deferment, such as during military service. Subsidized loans are given to students who demonstrate financial need. You will be notified by your school if you qualify for a subsidized loan, after you complete the Free Application for Federal Student Aid (FAFSA).

Subsidized loans are always federal student loans. If you take out a private student loan, you must pay all interest, including interest that is charged while you are in school.

 

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