Video: How to Compare Unsubsidized vs. Subsidized Student Loans

This Season: Tailgating; New Year, New You; Tax Time

Unsubsidized loans and subsidized loans differ on the point of interest, as an unsubsidized loan interest begins accruing the day it is borrowed and a subsidized loan interest does not begin to accrue until separate from full-time school. Compare these two types of loans with financial advice from a guidance counselor in this free video on student loans.

- How to Go to College Without Student Loans
- How to Find a Low-Interest Student Loan

Comments

Video Transcript

Hello, I'm Cheri Ashwood. I'm a guidance counselor, and today I'm going to tell you how to compare unsubsidized and subsidized student loans. The difference between unsubsidized and subsidized loan is that an unsubsidized loan is where the borrower, or the student, is responsible for repayment of the interest, or the interest accrues from the time that you awarded the loan. That means that when you are awarded the loan on Monday, on Monday it starts to build interest, and you are responsible for that interest. On a subsidized loan, the interest does not begin to accrue until separation from school. That can mean graduation, or at any point in time that you fail to be a full time student. You either separate from school completely, or drop below the required number of credit hours to be a full time student. With an unsubsidized student loan, you can begin to pay that interest at any time, a little bit at a time, or as much as is possible. If you can't repay it until graduation, upon the point where you gain employment, that's fine. But that interest will accrue. On a subsidized loan, you don't even have to think about interest until the time that you separate from school. I'm Cheri Ashwood. I'm a guidance counselor, and your future starts today.

Follow eHow: Follow @eHow

How to Compare Unsubsidized vs. Subsidized Student Loans

Comments

Related Ads

Related Articles & Videos