<p>I'm looking at the government's repayment FAQ for unsubsidized Staffords. The current lending limits are $5500 freshman, $6500 sophomore, $7500 each junior and senior, totalling $27,000. Interest is at 6.8% and there is a 1% origination fee (one "point") taken off the top.</p>
<p>It says that standard repayment is $310,72 per month for 10 years, totalling $37,286. It does not say whether this applies to borrowers who capitalize the interest, or borrowers who make payments against the accruing interest while they're still in school.</p>
<p>It seems like there should be two figures, depending on whether you capitalize. Can anybody clarify?</p>
<p>You should be able to pull up a loan calculator to get your answer.</p>
<p>Thank you - unfortunately, the calculator in the link starts with “loan balance”. We are still in HS, looking at this prospectively, and wondering what the loan balance will be if you borrow those amounts and capitalize interest while going through school. Certainly more than the principal borrowed!</p>
<p>Granite State Management & Resources website has a calculator that distinguishes between capitalizing and not. It would be $366/month capitalizing, so the $311 figure from the other calculators must assume uncapitalized. I added up four separate loans, one for each year, because the capitalization periods are staggered. If you wait until graduation to pay interest, you owe more interest on your freshman loan than on subsequent years’ loans.</p>
<p>
This payment amount assumes a starting balance of exactly $27,000. In other words, it includes no capitalized interest.</p>
<p>If you take the maximum loan each year and let the interest accumulate, you will owe approximately $31,600 at the end of 4 years, giving you a 10 year payment of about $360/month.</p>