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What is the difference between a Direct Subsidized Loan and a Direct Unsubsidized Loan?

The federal government pays the interest on a Direct Subsidized Loan while the student is enrolled at least half time (6 credit hours). Students may be eligible for a subsidized loan based on their financial need. A Direct Unsubsidized Loan is also a low-interest loan, like a subsidized loan, except the interest begins adding up immediately. A student’s eligibility for an unsubsidized loan is not based on financial need.The borrower does not have to begin repayment on either type of loan until they graduate or drop below half time enrollment (6 credits.) Students can make payment on their student loans while in school without penalty. For more information about student loans go to

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