Why are federal loans unsubsidized?

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Just a thought that popped into my head. Why are federal direct loans for medical students (and other professional/grad students) unsubsidized, while undergraduate students are offered subsidized federal loans? It doesn't make much sense to me, especially considering that the intensity of medical school makes working during school basically impossible for medical students (while working part-time is not at all uncommon for undergraduate students). Is it because pretty much all medical students will be entering the workforce immediately post-graduation (which doesn't mean much IMO since some residents are probably making below minimum wage with the number of hours they work)?

 

[AJS59]

Just a thought that popped into my head. Why are federal direct loans for medical students (and other professional/grad students) unsubsidized, while undergraduate students are offered subsidized federal loans? It doesn't make much sense to me, especially considering that the intensity of medical school makes working during school basically impossible for medical students (while working part-time is not at all uncommon for undergraduate students). Is it because pretty much all medical students will be entering the workforce immediately post-graduation (which doesn't mean much IMO since some residents are probably making below minimum wage with the number of hours they work)?

If I had to guess, probably has to do with the fact that a medical degree+residency is a guaranteed stable 6 figure job so the loans will eventually get paid. Not many college degrees offer the same thing.

 

[LucidSplash]

Just a thought that popped into my head. Why are federal direct loans for medical students (and other professional/grad students) unsubsidized, while undergraduate students are offered subsidized federal loans? It doesn't make much sense to me, especially considering that the intensity of medical school makes working during school basically impossible for medical students (while working part-time is not at all uncommon for undergraduate students). Is it because pretty much all medical students will be entering the workforce immediately post-graduation (which doesn't mean much IMO since some residents are probably making below minimum wage with the number of hours they work)?

Federal Direct Subsidized loans are awarded based on calculated financial need and thus the government has decided that such loans should not charge interest while one is a student and calculated to be a full-time student. You do start being charged interest if you drop below a certain number of credit hours, which encourages people to finish the degree they have started.

Federal Direct Unsubsidized Loans are loans for both undergraduate and graduate students that are not based on financial need. Eligibility is determined by your cost of attendance minus other financial aid (such as grants or scholarships). Thus as financial need is not factored in, the government has decided that interest should not be waived. Many people who are in graduate school are employed on some level, professional schools like medical school being one of the exceptions. Additionally there is some desire on a societal level to discourage people from taking out unlimited loans and getting themselves into more and more debt and staying a perpetual student to avoid paying the loans. Charging interest in part mitigates the risk that a small percentage of people would do that.