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subsidize

SUB-sih-dize /ˈsʌb.sɪ.daɪz/

verbB2GRETOEFLIELTSGMAT

formalacademiceconomic

To support an activity, service, or institution financially by paying part of its cost.

Implies partial financial contribution by an external authority (government/university) to reduce prices for users.

The story behind the word. From Latin 'subsidium', originally describing auxiliary troops sitting in reserve behind the front line to provide reinforcement. In economics, a 'subsidy' acts as secondary financial support sitting behind an activity to keep it standing.

Word relationships

underwrite: 'Underwrite' implies assuming financial risk or total financial backing, whereas 'subsidize' usually means covering part of the operational expense.

surcharge: A surcharge adds an extra cost to the buyer, while a subsidy reduces the price paid by the buyer.

Commonly confused with

reimburse: 'Reimburse' means paying someone back for money they already spent; 'subsidize' means reducing ongoing costs.

Word family

subsidy (noun): A grant or sum of money given to keep prices low.
subsidization (noun): The act of offering financial subsidies.

Collocations

subsidize education
heavily subsidize
subsidize housing
government subsidized

Example sentences

"The government continues to subsidize federal student loan interest while borrowers remain enrolled full-time." Government Policy
"University dining halls are subsidized by central administration to keep meal plans affordable for students." Campus Services

Memory hook

SUB (under) + SITY (city) -> Funds sitting UNDER the surface to keep costs DOWN. Subsidize to sit under and support.

When not to use

Do not use 'subsidize' when a customer pays 100% of a service's market price out of pocket.

Fun facts

Subsidized loans in the US student financial aid system do not accumulate interest for the borrower while they are in school, because the government pays the interest during that time.