Federal student loans are offered to every student that files the FAFSA. The types and amounts of federal loans you're eligible for are determined by your need level and college grade level. Federal student loans have fixed interest rates, are deferred, and can be interest-free while you’re enrolled at least half time in a college.
Important terms: "subsidized" vs. "unsubsidized"
- Subsidized loans
- Under a subsidized loan, the government pays (subsidizes) the interest on the loan while you are enrolled at least half time in a college.
- Unsubsidized loans
- Under an unsubsidized loan, interest begins accruing as soon as the loan is disbursed into your student account. Payments on the loan (and interest) are deferred while you are enrolled at least half time in a college. However, during this time, interest is still accruing and is being added to the principal balance of the loan. You have the option to pay the interest as it accrues.