Which answer best describes an unsubsidized federal loan

9:04 AM    Education & Reference , Financial Aid , Loan   

Q. Which answer best describes an unsubsidized federal loan

1. You are responsible for paying all the interest that accumulates on your loan.
2. You are only responsible for the cost of the loan.
3. The federal government will cover the interest accumulated on the loan while you're in school.
4. The federal government will only cover the interest accumulated on the loan if you graduate and earn a degree.

Answer: You are responsible for paying all the interest that accumulates on your loan.

Direct Unsubsidized Loans (sometimes called Unsubsidized Stafford Loans) are federal student loans borrowed through the Direct Loans program that offer undergraduate and graduate students a low, fixed interest rate and flexible repayment terms. Demonstrated financial need is not required to qualify. Students are responsible for paying all of the interest that adds up until the loan balance is paid off.

In case of unsubsidized student loans, the interest on the loan will not be paid by the Federal Government. Rather, it starts accumulate from when the student is studying his course.

Which type of loan requires that you pay the interest accumulated during college?
~ Unsubsidized federal loan

Other types of Loans and Definitions

Unsubsidized Loans	Type of federal student loan which government does not pay the interest while the student is in school.
Subsidized Loans	Type of federal student loan which the government pays the interest that accrues while the student is in school.
Stafford Loan	It is the most common type of federal loan awarded based on limits that are set for any individual loan as well financial need
Private Student Loans	Financed by private companies rather than the government. since these interest rates and fees aren't capped by the government. They cost more.
Perkins Loan	Another common federal student loan. These loans have a set 5% interest rate and a 10 year repayment period.