{"id":8510,"date":"2022-01-24T20:47:45","date_gmt":"2022-01-24T19:47:45","guid":{"rendered":"https:\/\/businessfinancenews.com\/?p=8510"},"modified":"2022-01-24T20:47:46","modified_gmt":"2022-01-24T19:47:46","slug":"student-loans-while-in-school","status":"publish","type":"post","link":"https:\/\/businessfinancenews.com\/loans\/student-loans-while-in-school\/","title":{"rendered":"Student Loans While In School"},"content":{"rendered":"\n

Student Loans While In School<\/h2>\n\n\n\n

We all know that student loans accrue interest, but exactly how and when interest begins accruing on various types of student loans can be a confusing topic. For example, some types of loans begin accruing interest while you are still in school, while others do not. Additionally, some loans accrue interest during the grace period<\/a> (the period between when you graduate, withdraw from school, or drop below half-time status, and when your first loan payment is due), while others don\u2019t start accruing interest until after the grace period is over.<\/p>\n\n\n\n

It\u2019s important to make sure you understand when interest will begin accruing on each of your student loans, since the amount of interest that accrues can substantially impact the amount of money you ultimately have to pay back. The first step is to check whether your loans are federal or private, and, if they\u2019re federal, what type they are (e.g. subsidized or unsubsidized). With subsidized loans, the government assists the borrower by paying the interest during certain periods.<\/p>\n\n\n\n

When interest capitalization occurs<\/h3>\n\n\n\n

Capitalization is the process of your unpaid interest being added to the principal balance of your loan. Interest does keep accruing after the capitalization process occurs, but the first one is likely to happen after your grace period on student loans is up.<\/p>\n\n\n\n

Here is a rundown of the different types of student loans, along with notes about when each one begins accruing interest. You can find additional information about federal student loan interest at the Federal Student Aid website<\/a>.<\/p>\n\n\n\n

Federal subsidized loans<\/h4>\n\n\n\n

These loans are available to students who have demonstrated financial need.<\/p>\n\n\n\n