Capitalize Interest after Cares Act???

[sylvanthus]

This could be disasterous! Anyone know if our interest capitalizes after this CARES Act suspension period? If so, this will cause over 100k interest to be added to my principle and cost me over 6k in interest per year. This will do me far more harm than good. Anyone know?

I feel like this is something we need to find out ASAP.

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[RangerBob]

I have no idea. Usually when you go into forbearance interest does capitalize. I’m not sure if this is something the govt thought about.

Regardless, there’s not a whole lot we can do except pay additional money to pay off interest. I’m also keeping autopay on-my payment is affordable. I’m curious to see if FedLoan still debuts my account or halts all payments...

 

[TMP-SMX]

Would hold off on actively going towards any change in the current plans until we get more details and answers in writing. It appears the 0% is a done deal until September. What there are open questions on (suggest you join the PSLF physician group on Facebook) are whether there is some action needed to qualify for 0 payments and if those payments count towards the 120 payments until forgiveness. If actively applying for forbearance keep in mind there was a forbearance available prior to the act being passed in congress and that doesn't count towards PSLF and may cause capitalization. If you are going towards PSLF this doesn't matter too much but if you aren't then yes that would be a disaster. Keep in mind also depending on your income level and repayment plan you'll be capitalizing anyway when you no longer meet partial financial hardship (that's a good thing it means you are making money finally). At that point the consideration is how quickly you want to refinance to a private lender.