Does interest capitalize on standard repayment plans? Forum

[wired]

I just spoke with someone from MyFedLoans and I'm walking away pretty confused. Her spiel was that when you are on IBR, your interest never capitalizes as long as you are on it. But if you are on a standard repayment plan, your interest capitalizes every quarter. Is that right? So if I'm on a standard repayment plan, all of the interest that accrues during each quarter capitalizes and becomes part of the loan? I assumed that on a standard repayment plan interest wouldn't capitalize because you would be paying all of it off. I know interest didn't capitalize on IBR, but I assumed that only mattered because on IBR you're often paying less than the interest that is accruing.

Anyone?

[debdeb2]

there are probably more variables at play than you mentioned, but here's some info:

http://askheatherjarvis.com/blog/what-t ... talization