Capitalizing interest yearly following deferement

[randomlogik]

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I was able to defer my loans (subsidized and unsubsidized stafford) for the first few years of residency. They are now currently in forbearance. The interest was capitalized yearly on the unsubsidized loans. I was talking to a fellow resident who said his interest was not capitalized yet since technically the loans have never left deferment status. Does anyone know anything about this? Or is it lender dependent.

 

[dpmd]

Mine capitalized yearly. It is possible the fellow resident was mistaken, or it may be lender dependent. I have nelnet.

I was mad I didn't realize this since my plan was to pay the interest before it capitalized, but figured it wouldn't capitalize until I could no longer renew. Oops.

 

[TMP-SMX]

You had to apply for deferment/forbearance yearly and most lenders will capitalize your loans on change of status (so each year).

 

[badasshairday]

You had to apply for deferment/forbearance yearly and most lenders will capitalize your loans on change of status (so each year).

So if one forebears, every 12 months the interest will capitalize? So within a given year, interest is based on a one principle amount per 12 months?

Technically one can forebear and pay off all interest and some principle hence lowering the amount interest accrues for the following year. Is this correct?