Stafford loan interest capitalization

[Anonymous]

Under what circumstances does interest on Stafford loans capitalize? From what I understand they capitalize when one enters repayment, and at the end of forbearance or deferment. What about income based repayment, does interest capitalize when you no longer qualify for IBR? Or if you switch repayment plans?

[Anonymous]

For subsidized staffords goverment pays your interest while you are in school and during 6-months post- school deferment. So for subsidized loans interest only capitalizes after deferment. For unsubsidized staffords interest accrues from the moment the loan is taken and capitalizes durinjg both deferment and forbearance periods. I know IBR allows you to sometimes pay less that even the interest due, but not sure if its ever capitalized.

[Anonymous]

Anonymous wrote:For subsidized staffords goverment pays your interest while you are in school and during 6-months post- school deferment. So for subsidized loans interest only capitalizes after deferment. For unsubsidized staffords interest accrues from the moment the loan is taken and capitalizes durinjg both deferment and forbearance periods. I know IBR allows you to sometimes pay less that even the interest due, but not sure if its ever capitalized.

sorry, for subsidized interest is only capitalized after forbearance.

[Anonymous]

Pp here. Just looked it up - IBR capitalizes unpaid interest if you leave the plan or no longer have financial hardship. ICR capitalizes unpaid interest annually.

[Anonymous]

Thanks for the info! Though it seems I made a disastrous mistake in not renewing my IBR status on time.