The amount is based upon the average cost of education for a 9 month school year, and is used to determine eligibility for financial aid. Capitalization - The practice of adding interest to the principal or loan amount, instead of paying the interest while in school.
Capitalization eliminates payments while in school, but does increase the amount owed after school.
Capitalization costs you money in the long run. Cost of Attendance - See Budget, above. Default - Failure to repay or otherwise meet the terms and conditions of a loan. Deferment - The postponement of payments on a student loan. Most deferments are legal entitlements.