The Federal Direct Unsubsidized loan is a federal loan that can be used to help pay college expenses during the student’s enrollment. This loan will accrue interest while the borrower is in school and during the grace period. If the borrower chooses not to pay the interest while they are in school, the interest will accrue and be capitalized. This means that the interest will be added to the principal amount of the loan.
After the borrower graduates or otherwise drops below half-time enrollment, they will have a six-month grace period before payments are required. During this time, the loan servicer will contact the student and notify them of their first payment due date.