PERIODS WHEN WE CHARGE INTEREST. In general, we charge interest on Direct Unsubsidized Loans during all periods, as explained below. If a TEACH Grant that you received is converted to a Direct Unsubsidized Loan, we also charge interest from the date of each TEACH Grant disbursement. We charge interest on a Direct Unsubsidized Loan— • While you are enrolled in school at least half-time; • During your grace period; • During most periods when you are repaying your loans; • During most deferment periods; and • During forbearance periods. We do not charge interest on a Direct Unsubsidized Loan— • During some periods of repayment under the REPAYE Plan; • During periods of active duty military service that qualify you for the no accrual of interest benefit for active duty service members (see below); and • During periods of deferment for cancer treatment (see Item 13 in this section of the Agreement). We do not charge interest on any type of Direct Loan Program loan first disbursed on or after October 1, 2008 during periods while you are on qualifying active military duty in an area of hostilities where your service qualifies you for special pay (for up to 60 months). If you received a TEACH Grant that was later converted to a Direct Unsubsidized Loan, you are eligible for the no accrual of interest benefit on that loan if the TEACH Xxxxx was first disbursed on or after October 1, 2008. If you do not pay the interest as it accrues on a Direct Unsubsidized Loan, we will add the accrued interest to the unpaid principal balance of your loan. This is called “capitalization.” Capitalization increases the principal amount you owe on the loan and the total amount of interest you will pay. At the time a TEACH Xxxxx is converted to a Direct Unsubsidized Loan, you will be given the opportunity to pay the interest that accrued from the date of the first disbursement of the TEACH Grant. If you do not pay this interest, we will capitalize at the end of your 6-month grace period (see Item 8 in this section of the Agreement).
