🏫 College Advising

A student qualifies for both a Federal Direct Subsidized Loan and a Federal Direct Unsubsidized Loan. During the in-school deferment period, which statement accurately describes the interest accrual on these loans?

A Interest accrues on both loans, but the government pays it on the subsidized loan.
B Interest accrues only on the unsubsidized loan; the subsidized loan does not accrue interest.
C Interest accrues on the subsidized loan, but not on the unsubsidized loan.
D Neither loan accrues interest until six months after the student graduates.

✓ Correct Answer: Option B

During in-school deferment, the government pays the interest on Federal Direct Subsidized Loans, meaning no interest accrues for the student. Interest, however, accrues on Federal Direct Unsubsidized Loans from the time they are disbursed.

💡 Why is B) the correct answer?

The correct answer to the question "A student qualifies for both a Federal Direct Subsidized Loan and a Federal Direct Unsubsidized Loan. During the in-school deferment period, which statement accurately describes the interest accrual on these loans?" is Option B: Interest accrues only on the unsubsidized loan; the subsidized loan does not accrue interest..

The other options — A) Interest accrues on both loans, but the government pays it on the subsidized loan., C) Interest accrues on the subsidized loan, but not on the unsubsidized loan., D) Neither loan accrues interest until six months after the student graduates. — are incorrect for this College Advising question. As explained above: During in-school deferment, the government pays the interest on Federal Direct Subsidized Loans, meaning no interest accrues for the student. Interest, however, accrues on Federal Direct Unsubsidized…

📚 About This College Advising Practice Question

This 3-level College Advising question from the Financial Aid & Scholarships topic is part of BrainForge Quiz's free exam preparation library. Each question includes the correct answer and a detailed explanation to help you understand the underlying concept, not just memorize the answer.

How to use this page: Read the question above, consider all four options (A through D), then check the highlighted correct answer and explanation. For active timed practice, start a free College Advising practice test or use flashcards for spaced repetition review.

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