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Duke University
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Unweighted GPA: 3.7
SAT: 720 math
| 800 verbal


Low accuracy (4 of 18 factors)

SOS: How do unsubsidized loans work?

So I'm starting to get my head around college financing and I keep hearing about unsubsidized loans. Can someone break down for me how they work? Like, when do I have to start paying them back and how does the interest work while I'm still in school?

7 months ago

Unsubsidized loans are a type of federal student loan that require you to be responsible for all the interest that accrues from the time the loan is disbursed, even while you're in school or during grace periods. Unlike subsidized loans, your financial need does not impact your eligibility for unsubsidized loans.

Interest on these loans begins to accumulate as soon as the funds are disbursed to your college account. While you're not required to pay the interest while you're in school at least half-time, during the grace period, or during deferment periods, any unpaid interest will be capitalized, or added to the principal amount of your loan, if not paid. This increases the total amount you owe.

Repayment typically begins six months after graduation, withdrawal from school, or dropping below half-time enrollment, which is considered your grace period. During this time, you can make payments on the interest to avoid the capitalization. The interest rate for unsubsidized loans is fixed, so it will not change over the life of your loan.

7 months ago

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