Federal Direct Loans are available to all students who file the Free Application for Federal Student Aid (FAFSA) and are enrolled at least half-time.
Subsidized Loan: Awarded on the basis of financial need. No interest is charged before you begin repayment. The federal government “subsidizes” the interest during periods of enrollment.
Unsubsidized Loan: Not awarded on the basis of need. Interest is charged from the time the loan is disbursed until it is paid in full. As the interest accumulates, it will be capitalized; meaning the interest will be added to the principal amount of the loan and additional interest will then be based upon the higher amount.