For Fall 2012 and future Fall 2013 Subsidized Direct Loan Borrowers:
The Federal Government will no longer withhold interest during the six-month grace period before loans go into repayment. According to Federal Student Aid, “the interest will be capitalized (added to the principal amount of your loan) when the grace period ends.” Borrowers do not need to make payments during the grace period, as with unsubsidized Direct Loans.
This change applies only to Direct Loans disbursed after July 1, 2012 and before July 1, 2014.
