I just got a interest notice which says this is not a bill. But I have hard time understanding what this notice is for, if it's not a bill then why does it asking me to pay? It says I have total outstanding interest $349.88 which needs to be paid by 06/21/2017.

It says "This is the total amount of interest that will capitalize (be added to your principal balance) at the end of your current status if you do not make a payment to satisfy the full amount by the applicable Anticipated Capitalization Date. You will pay more over time since you will be accruing interest on a higher loan balance."

This is my first time trying to deal with these bills after I graduated college and I want to know what this notice is trying to tell me.

What is the meaning of interest being capitalized?

Why does it say it's not a bill if it still asks me to pay some amount of money, like it's trying to deceive me.

I already passed the due date of Anticipated Capitalization Date, what should I be expecting now? Is my debt going to higher?

2 Answers 2


Yes, your debt goes up by that amount. It becomes part of the loan, and you'll pay interest on it. That's what "capitalization " means. It's not a bill because you don't have to pay it. We'll, not yet…


Most likely that's the amount of interest that accrued on the loan while you were in school. If you had paid that amount before 6/21, you would have just paid off accrued interest and your loan balance would have stayed the same.

Since you did not pay the interest, it will be added to your loan balance and you will just pay it off as part of the loan (plus compounded interest).

If you pay off your loan at 5% over 30 years (hopefully you won't, but that's what they're amortized for), that $350 will compound and become $1,563. Essentially you're "borrowing" $350 at 5% interest for 30 years.

Hopefully that motivates you to pay it off sooner that that...

  • I just paid the amount today, so I guess it's already too late. But now I understand what this means... thank you. Commented Jun 24, 2017 at 3:51

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