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Subsidized and Unsubsidized Student Loans: Explained and Compared

By Matthew Frankel, CFP – Updated Dec 11, 2023 at 10:16AM

Key Points

  • Subsidized and unsubsidized student loans are the two most common types of federal direct loans made to current students
  • Subsidized loans are designed for undergraduate students with demonstrated financial need, and they can save the borrower quite a bit
  • Unsubsidized loans don't require any financial need and can be used by any student enrolled half-time or more in a qualifying program

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