Private College Student Loan

How often is interest compounded or capitalized onto a federal direct stafford student loan?

For example, if I have a student loan of $5000, and the interest rate is fixed at 6.0%. How often is the 6.0% added onto the principle? Do I add on 6.0% after every month or is it every year? For example, by month: First month: $5000 Second month: $5000 + 6.0% = $5300 Third month: $5300 + 6.0% = $5618 etc. By year the amount of interest would just be $300, but I'm not sure if that is the case. I can't find anywhere where it says how often interest is added either.

Public Comments

1. you actually have the answers right there. you actually got the correct % in your question.the interest % is added each month. the good thing about this particular loan (stafford) is they have two types. One is the unsub and the other is sub. unsub you pay interest while attending school. the sub you dont have to pay interest till after you graduate, and to top it off the gov pays all accumulating interest while you are enrolled in a school till you graduate. student loans are different from regular loans. not often will it have a escrow on the interest. the interest normally stays the same for the lifetime of the loan.