Help me understand interest capitalization please Forum

[riskaverse]

For Direct unsub loans and PLUS loans, at what point would the interest capitalize? I used to think interest was always calculated compound style day by day, so inherently capitalized. So as I understand it, instead, the interest day to day is steady for X period of time depending on the principle. After Y time passes, and if the interest is unpaid, it gets added to the principle and a new interest amount day to day is calculated for another X period of time. So what is X period of time? 1 year? Or does it only capitalize after 3 years of law school are over?

Clearly new to this, any help is appreciated!

[bsktbll28082]

Not entirely clear on the concept myself. But here's a link for some FAQs- maybe it'll help clear things up https://myfedloan.org/help-center/faq/i ... -faq.shtml

I think it capitalizes through law school because it's unsubsidized.

[TLSModBot]

You capitalize interest only when it appears at the beginning of a sentence

[lymenheimer]

You capitalize interest only when it appears at the beginning of a sentence

Thanks, dad.