Interest accrues every day from the date of disbursement; however, depending on your loan type or repayment plan, such as Income-Driven Repayment plans, you may not always be responsible to pay the accrued interest.
To calculate your daily interest accrual, use the following formula:
Interest rate × current principal balance ÷ number of days in the year = daily interest
Example: Sara Student has a $10,000.00 current principal balance and
6% interest rate.
As a result, Sara's loans will accrue $1.64 in interest per day (until her principal balance is reduced by future payments).
The U.S. Department of Education will pay the accrued interest on your subsidized student loan during:
- Your grace period if your loan was disbursed before July 1, 2012 or on/after July 1, 2014.
- An approved deferment.