What is the difference between subsidized and unsubsidized Federal Stafford Loans?

The subsidized loan is awarded to a student who demonstrates financial need by filing the Free Application for Federal Student Aid (FAFSA). The federal government pays the interest on these loans while the student is in school at least half time and during certain periods, such as grace and deferment.nnThe unsubsidized loan is awarded to students regardless of financial need. The student will be charged interest on the loan from the time the loan is disbursed until it is paid in full. Students can either pay the interest while in school, or it will be capitalized (added to their principal loan balance, thus increasing the amount they will repay).

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