All of my graduate loans are federal loans and I am on ICR.  I have a decent job but it doesn’t pay that well.  At this time, my ICR payments are low—only $394 a month—and I can afford more, but not the ~$1,500/month it would take me to keep up with interest on a standard repayment plan.  I called today to see if there was some way I could make two payments a month: my monthly bill and then something to my principal if I asked for it to be directly applied.  Apparently you can’t do that with the Federal Loans, but the advisor on the phone said that I still am incentivized to pay as much as I can monthly because, once the interest reaches 10% of my original amount owed from the time my loans entered repayment, capitalization would stop.  This sounded great until I looked at the website again and I am not sure I really understand.  Can someone please break this down as simply as possible? What happens when you hit that 10% point? It adds to your principal, but then you keep accruing interest—but it’s not added back?

It still seems like I would never pay off this debt—barring any sort of smart employment moves and earning the 6-figure salary I was lulled into believing I’d earn back when I was applying to graduate school (no, not bitter at all).  So, I am not sure how much extra I should pay.  As much as I possibly can? Or a generous amount above the $394 but leaving some in savings.

Thank you for any insight!