Question

how are direct subsidized and direct unsubsidized loans different?

○ subsidized loans are based on financial need, and unsubsidized loans
are not.

○ subsidized loans have no borrowing limit, and unsubsidized loans do.

○ unsubsidized loans are based on need, and subsidized loans are not.

○ interest accrues on subsidized loans while a student is in school but
not on unsubsidized loans.

Explanation:

Direct subsidized loans are awarded based on financial need. The U.S. Department of Education pays the interest on subsidized loans while the borrower is in school at least half - time, during the grace period, and during deferment periods. Direct unsubsidized loans are not based on financial need. Interest accrues on unsubsidized loans from the time the loan is disbursed, even while the borrower is in school.

• Analyze the first option: Subsidized loans are based on financial need, and unsubsidized loans are not. This is correct as per the definitions of subsidized (need - based) and unsubsidized (non - need - based) loans.
• Analyze the second option: Both subsidized and unsubsidized loans have borrowing limits. So this option is incorrect.
• Analyze the third option: It is the opposite. Subsidized loans are based on need, unsubsidized are not. So this option is incorrect.
• Analyze the fourth option: Interest does not accrue on subsidized loans while in school (paid by the government), but it does accrue on unsubsidized loans while in school. So this option is incorrect.

Answer:

Subsidized loans are based on financial need, and unsubsidized loans are not.