Some federal loans are subsidized--the government pays the interst while you are in school.
Some federal loans are unsubsidized--intrest is accrued while you are in school.
Private loans (ones that are NOT guaranteed by the governement) are NOT subsidized (read: they are UNsubsidized).
For unsubsidized loans you have two options: (1) pay the interest as you go yourself, or (2) CAPITALIZE the interest. Capitalization is when you let them add the interest to your principal (the principal is the original amount borrowed) in exchange for not having to pay the interest as you go .
Capitalizing your interest on an unsubsidized loan means you don't pay anything while you're in school, but it also means that you will pay more in the long run (because you will be paying interest on the interest you accrue, as opposed to paying the original interest as you go.)
Fully subsidized loans do not involve capitalization, because someone else (the government) is already paying the interest (i.e. doing option 1 of the unsubsidized loans) for you. They will only subsidize up to $8500/year in loans. The other 10k/year you can get from the government will be unsubsidized.
If you are like most people you will need to borrow more than the subsidized max of $8500. And no matter who your lender (government, Citibank, Access Group or anybody else), that "more" will be unsubsidized.
As such, count on either having to make interest payments while you study, or agree to have it capitalized (with the understanding that you will end up paying more in the long run for the convenience of not paying now).
Personally, I will have it capitalized--I won't have the money to be making any more monthly payments than absolutely necessary, and the last thing I will need during law school is yet another thing to stress me out...So don't freak out about this too much. Capitalization is very much a necessary evil...