Question

Which answer best describes an unsubsidized federal loan?

AThe federal government will only cover the interest accumulated on the loan if you graduate and earn a degree.
BThe federal government will cover the interest accumulated on the loan while you're in school.
CYou are responsible for paying all the interest that accumulates on your loan.
DYou are only responsible for the cost of the loan.

Answer 1

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

Step-by-step explanation:

An unsubsidized federal loan is a type of loan given by the government to cover undergraduate and graduate studies that has low and fixed interest rates and in which the student has to pay all the interest until the payment of the full amount. Two major features of of these loans are that students don't have to demonstrate financial need to get them and they don't have to make payments while studying.

Answer 2

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

Federal government generally provide subsidized loan with lower interest rate, no interest payment during study period (interest holiday) and various other feature. But if the federal loan is unsubsidized, we have to pay the entire amount of interest accumulated on the loan. In this case, no discount, rebate or subsidy is allowed on the loan amount.