Loans provided either by the Department of Education or through private loans in which interest accrues on the original principal amount as soon as the funds are dispersed. The interest will continue to grow while the student is in school (and deferment). That interest amount will then get added to the the principal amount once the loan goes in to the repayment period.
Example: For a $10,000 loan after four years at a 6.5% interest rate the new principal amount will be $12,080. About 20 percent higher!
