Subsidized and Unsubsidized Loan Program

Hi all,

I had some good stuff on student loans.
Thought of sharing this information in this forum.
Seems to me like a happening place out here!

Subsidized and Unsubsidized Loan

A College Loan or Stafford loan is made available to students from the US Government and managed through many different private banking institutions. These student loans can be categorized under two heads:

• Subsidized Loans
  
• Unsubsidized Loans
  

In most cases a subsidized loan is granted for financial support. There is no interest charged before you begin repaying your loan or during periods of authorized deferment. The US Government subsidizes or supports the interest rate payment during the period in between.
On the other hand an unsubsidized loan is not awarded on the basis of financial requirement. The disadvantage in unsubsidized loan is that you need to pay interest from the moment your loan is issued and continues until the repayment is complete for the total amount.
If you allow the interest to accrue during the period of time when payment is not a compulsion, it proves disadvantageous. In this case there will be additional interest charged on the higher amount. Your interest rate will now be even higher and it will take a much longer time to complete your repayment plans.

Hope this will be useful for members here.

Thanks
Stanley