FinAid | Calculators | Cost of Interest Capitalization Calculator

Cost of Interest Capitalization Calculator

On subsidized Stafford Loans, the federal government pays the interest while the student is still in school. On unsubsidized Stafford Loans, however, the student is responsible for the interest while he or she is still in school.

Students may, if they wish, defer paying the interest by capitalizing it, which adds it to the principal of the loan, thereby increasing the size of the loan. This Cost of Interest Capitalization Calculator computes an estimate of the accrued interest and the new loan balance at the end of the deferment period. It also presents the impact of capitalization on the total amount paid over the lifetime of the loan.