What is the difference between subsidized and unsubsidized federal student loans?

✓ Correct Answer: Option B

Direct Subsidized: need-based, government pays interest during school/grace/deferment. Direct Unsubsidized: not need-based, interest accrues from day one. Both: fixed rate, 6-month grace period. Annual limits by year in school. Subsidized available to undergrads only.