How does interest accrue?
Interest accrues in monthly increments. Students with unsubsidized loans may decide to pay the interest on their loan as it accumulates or accrues each month so that their loan balance remains the same as the amount they borrowed. Then, when the student enters repayment and begins making both principal and interest payments, the total loan balance is lower than it would have been if the student had not paid the interest on the loan as it accrued or accumulated each month.
