Definitions for "Capitalization of Interest"
Addition of accrued, unpaid interest to the principal of your loan.
Adding the amount of unpaid interest to the amount originally borrowed
Capitalizing interest means adding unpaid, accumulated interest to the principal balance of your loan. Capitalization increases the total cost of your loan. If you choose to let your interest be capitalized, you repay more money in total than if you pay the interest while you are in school. Whichever option you choose, you are responsible for paying the full amount of all interest on the loan.