Dear Heather,
I am in a unique situation because I live and earn in Brazil, but I am about to start a Master’s program in the U.S. where I qualify for approximately $8K in subsidized and $12K in unsubsidized Stafford loans per year.  Please correct me if I am wrong, but it seems to me under current rules that I will pay administrative charges on all 20K each year (two year program) and will accumulate (but not compound) the interest on the 12K that is unsubsidized per year so that at the end of my two years of study, plus the six month grace period, I will have in debt 40K, plus two a half years interest on 12K, plus one and a half years interest on another 12K… all told, about $43,264.00 in debt at the time I will go into repayment.  At that point, as I understand it, with my under $30,000.00 salary (when earned in Reais and converted into dollars) and four member family, I will qualify for monthly payments of $0 and, as I understand it, at that point the federal government would assume the interest payments for the next three years.  So, am I correct in understanding that now five and a half years after I started my schooling, I would still have the same approximately $43,264.00 debt that I had at the time I began repayment?  And if I, at that point, draw out of retirement savings that amount and pay off my debt in full, will I owe no more anything to anyone?

Well, I can’t really speak to your individual situation since I don’t have all the information I’d need to provide person specific counseling.  That said, I’m not seeing any error in your general reasoning.  I apologize for the delayed response, for a brief period I failed to get the email notifications of new forum posts and didn’t realize your question was pending.