Subsidized loans the government pays the interest until the end of your deferment period (usually 6 months after you graduate). Un-subsidized loans the interest begins accruing immediately after you borrow it and continues to accrue (daily actually) while you're in school and until paid off. So with un-subsidized you borrow 20K the first year, 20K the second, and by the time your finish school you owe 43K with $3000 in interest added in (these numbers are made up, but you can look up a loan calculator to get real numbers).