Subsidized Loans are loans that can be borrowed by undergraduate students with demonstrated financial need, as determined by information from your FAFSA and other financial aid resources. Subsidized Loans do not accrue interest while the student is in school at least half-time or during repayment deferment periods.

Unsubsidized Loans can be borrowed by both undergraduate and graduate students and are not based on financial need. Eligibility is also determined by information from your FAFSA. Interest is assessed on unsubsidized loans while the borrower is in school, repayment deferment, and repayment grace periods. Unlike a subsidized loan, you are responsible for the interest from the time the unsubsidized loan is disbursed until it’s paid in full. You can choose to pay the interest or allow it to accrue (accumulate) and be capitalized (that is, added to the principal amount of your loan). Capitalizing the interest will increase the amount you have to repay. For information on the current loan interest rates, visit https://inside.nku.edu/financialaid/programs.html.