Unsubsidized: The fixed APR is 3. These rates apply to loans disbursed on or after July 1, , through June 30, Subsidized: Interest is paid by the Education Department while you're enrolled at least half time in college. Unsubsidized: Interest begins accruing as soon as the loan is disbursed, including while students are enrolled in school. Subsidized: No payments are due in the first six months after you leave school. The Education Department will continue to pay interest during this time.
Unsubsidized: Loan payments are not due in the first six months after you leave school, but interest will continue to build. Subsidized: Interest is paid by the Education Department during deferment, which lets you temporarily pause payments. Unsubsidized: Interest continues to collect during deferment and will be added to your principal loan amount. Taking on too much student loan debt may make repayment difficult after you graduate.
Borrow federal loans first: Private student loans often carry higher interest rates and require a co-signer if a student borrower has no credit history.
Both unsubsidized and subsidized federal loans also offer more borrower repayment plans and forgiveness options than private loans. Consider private loans only if you still need to fill a payment gap to meet college costs. Compare all private loan options, including their interest rates as well as repayment and forbearance options, before you borrow.
What you need to qualify. Must demonstrate financial need. How much you can borrow. Education Department pays interest. Interest accrues. Who can borrow. Undergraduate students only. Any U. After you accept your financial aid, funds are sent to the school to cover your costs. Anything left over is sent on to you for use to help pay other costs related to college.
In addition to seeing whether you qualify for subsidized student loans, your FAFSA also helps determine your eligibility for grants. Note that federal loans come with standardized fees and interest rates. On top of that, the interest rate is the same. Interest rates are set each year, based on the U. Treasury auctions. The rate remains fixed for the life of your loan.
In general, even with the difference between subsidized and unsubsidized student loans, borrowers should attempt to exhaust federal aid before turning to private student loans. Additionally, private loans can sometimes have higher interest rates and you need to meet credit criteria.
There are no credit criteria for subsidized and unsubsidized student loans. However, for those who have good credit, above , or who can get a cosigner, private loans could potentially have lower interest rates. The loan limits are also higher with private loans, which can help you cover the total cost of attendance. For the most part, it makes sense to take scholarships and grants, then turn to subsidized federal loans and then go to unsubsidized federal loans.
After hitting federal loan limits, you can turn to private student lenders, like those available through Juno, to bridge the gap to cost of attendance. Juno offers a unique negotiated offer with lenders and that can be a way for you to get more bang for your refinance buck. If you can qualify for a subsidized loan vs. Understanding the difference between subsidized and unsubsidized student loans can make a difference in what you ultimately end up paying for college.
Organizations like Juno, which negotiates deals with private lenders, can further help you get lower rates and fill college funding gaps if you have good credit. Juno can help you to find a student loan or refinance a loan at the most competitive possible rate. We get groups of buyers together and negotiate on their behalf with lenders to save them money on private student loans and private student loan refinance loans.
Join Juno today to find out more about your options for affordable private student loans to help fund your degree. To see examples of how your Subsidized or Unsubsidized award amount will be determined.
If you are a first-time borrower on or after July 1, , there is a limit on the maximum period of time measured in academic years that you can receive Direct Subsidized Loans. If this limit applies to you, you may not receive Direct Subsidized Loans for more than percent of the published length of your program.
Alberta Gator is a first year dependent undergraduate student. She is, however, eligible for an Unsubsidized Loan. The amount you can borrow through the Federal Direct Loan Program is determined by your dependency status and classification in college.
The annual and aggregate loan limits are listed in the charts below.
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