<p>
Up to $23,000 of the $31,000 can be subsidized if the student has financial need (as determined by FAFSA). If the student has no need, then the whole loan will be unsubsidized. </p>
<p>OP, what is your EFC and the school’s COA? If your EFC is higher than the school’s COA, then you are not eligible for subsidized loans.</p>
<p>And yes, the loan will accumulate 6.8% a year on the outstanding balance (and you pay interest on the interest as it is added to the loan balance). After 10 years, is you do not pay any interest on the loan as you go, the loan balance on a $1,000 loan would increase to around $1900.</p>