This is a form of federal financial aid where monthly charges is owed from the very first day the grant is being disbursed, usually at the beginning of the semester. Borrowers of non-subsidised undergraduate grants can choose to settle back the monthly charges right from the beginning if they wish, or they can choose to allow the monthly charges to pile up or accrue until reimbursement starts.  Unpaid accrued monthly charges will then be added to the original amount, in what is commonly known as capitalization. In times of low-monthly charges rates, capitalization may not be as huge a problem. But if future rates for new grants go way up, avoiding capitalization could become increasingly important.