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University of Wyoming

Subsidized & Unsubsidized Loans


  • Subsidized - You don't pay the interest as long as you remain enrolled in school in at least a half-time status.
  • Unsubsidized - Interest accrues while you're in school; you can pay it as it accrues, or let it capitalize.

The difference between a subsidized and unsubsidized loan is how the interest is paid. For a subsidized loan, the federal government will pay the interest for you while you are in school, in your grace period, and during authorized periods of deferment or repayment. Unsubsidized loans are available to students who do not qualify for subsidized Stafford loans. With an unsubsidized loan you must normally pay for the interest on the loan while you're in school. If you get an unsubsidized loan but don't wish to pay the interest until you're out of school, you also have the option to add the interest on your loan to the principal, or "capitalize" it.