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Our Best Answer What is the difference between subsidized and unsubsidized loans?

Federal Direct Loans are offered by the federal government and will be automatically awarded by our office to eligible students. The FAFSA must be completed each year in which a student wishes to borrow the Federal Direct Loan. Need-based subsidized loans do not accrue interest while the student is in school. The federal government pays the interest while the student is enrolled at least half time. Unsubsidized loans begin accruing interest immediately upon the loan's first disbursement. These loans are not need-based. Additional information about these loans, including interest rates and annual and lifetime loan limits, can be found on our Student Central website.

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