Interest Capitalization Question

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Interest Capitalization Question

Postby SpiteFence » Wed Apr 25, 2012 6:07 pm

So here is what I DO know: (1) While in school, interest is not capitalized. (2) Unpaid interest is supposed to capitalize once the grace period ends. (3) If I choose IBR and I have a "partial financial hardship" (IBR capped payment<standard repayment), then interest does not capitalize until the hardship ends.

My question is how 2 and 3 interact. If I immediately enter repayment, choose IBR and am determined to have a "partial financial hardship," does my unpaid interest that accrued while in school still capitalize?

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