Federal Student Loan Consulting
  • STUDENT LOANS 101

Student Loans 101 /
Understanding Interest
/

INTEREST IS THE MONEY AN INDIVIDUAL PAYS FOR BORROWED FUNDS. INTEREST THAT ACCUMULATES IS BASED ON THE LOAN'S UNPAID BALANCE AND ACCRUES ON A STUDENT LOAN EVERY SINGLE DAY, EVEN IF THE ACCOUNT IS NOT IN THE REPAYMENT PERIOD.

37,000,000,000

STUDENTS

Subsidized Student Loan

Every day, from the day the repayment period starts until you make the last payment, unless in a period of deferment.

23,000

AVERAGE DEBT AMOUNT

When Exactly Does Interest Accrue

Interest accrues every day from the date of disbursement, depending on your loan type or repayment plan type you may not always be responsible to pay the accrued interest.

27%

DELINQUENCY RATE

Unsubsidized Student Loan

Every day, from the day the repayment period starts until you make the last payment, unless in a period of deferment.

INTEREST NOTICE

An interest notice is different from a bill.


- An interest notice is a summary that details the interest accrued on your student loans during a certain period. ​


​- As long as you have a valid email address on file and at least one unsubsidized loan, your student loan servicer will send you a quarterly email while you are in school detailing the amount of interest that accrues.


ED WILL PAY THE ACCRUED INTEREST ON YOUR SUBSIDIZED LOANS IF

1. You're enrolled in school as a full-time student.

2. Your student loan is in grace period and your loan was disbursed before July 1, 2012 or on/after July 1, 2014.

3. You're on an approved Deferment.

HOW TO CALCULATE INTEREST

To calculate your daily interest accrue use the following formula: 

​Interest Rate x Current Principal = Total Balance ÷ Number  of  of umber  of  of umber  of  of umber  of  of umber  of  of 

Days in a Year = Daily Interest


ExampleSara's has $10,000.00 of student loan debt at a 6% interest rate.

Sara's loans will accrue $1.64 in interest per day.