Skip to Content JB Pritzker, Governor, State of Illinois

Subsidized Loans vs. Unsubsidized Loans

Eligibility for subsidized loans is based on financial need, as determined by the federal-need analysis process. As the name implies, the federal government pays the interest while you are still in school as at least a half-time student, during the six-month grace period, and during periods of deferment. You are responsible for paying the interest during repayment.

Eligibility for unsubsidized loans is not based on your financial need and you are responsible for the interest from the date the funds are disbursed.

For both subsidized and unsubsidized loans, the financial aid administrator at your college determines the amount for which you are eligible.