| This worksheet shows you how
unpaid accrued interest, if capitalized,
can affect the outstanding balance of your loan.
Some loan programs allow students to defer payment
of principal and interest while in school. If
you qualify for federal interest subsidy, the federal
government may pay the interest during this period.
Loans eligible for this type of subsidy include Stafford
loans and Perkins
loans.
If your loan is not eligible for this federal interest
subsidy, or if your loan is in forbearance (periods
when you are allowed by your loan servicer to stop making
payments temporarily because of financial hardship),
the balance of your loan will increase by the amount
of unpaid interest that accrues during the period when
you are not making payments.
You may want to consider
making some payments toward accrued interest, even when
payments are not required, to minimize the growth of
your loan balance.
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