What is the difference between Federal Subsidized Loans and Federal Unsubsidized Loans?

"Subsidized" means that the federal government pays the interest on a borrower's loan, while the student is enrolled at least half time and during grace periods and deferments. Students must demonstrate financial need to qualify for subsidized loans.

The federal government does not pay interest on unsubsidized loans while the student is in school, during the grace period, or while in deferment. Interest is charged on the loan from the date on which it is disbursed until it is paid in full. The interest may be paid on a monthly basis, or allowed to accumulate, in which case it will be capitalized quarterly and added back to the principal amount borrowed. Students may borrow unsubsidized loans regardless of financial need.

The Federal Direct PLUS Loan is another unsubsidized loan program for parent borrowers which is designed for middle- and higher- income families who generally do not qualify for other financial assistance and who can accommodate loan payments while their dependent child is in school. Parents may also borrow Federal Direct PLUS Loan funds to supplement resources available to their dependent student. Parents who do not have an adverse credit history may borrow up to the total cost of the student's education, less any other aid received by the student.

Hope it helped. Read more student loan articles at http://www.astudentloandebt.com/