It's not interest free. However, for personal, federal loans, the interest only applies to the principal, which is (value of principal + interest) when the loan

It's not interest free. However, for personal, federal loans, the interest only applies to the principal, which is (value of principal + interest) when the loan enters the repayment period (so 1 year after graduation). So the loan only compounds once, when it enters repayment. My federal loans were a mix between 4.5% and 7.9%, with the 7.9% loans making up the bulk of my total amount. Additionally, I had something like a 4% "disbursement fee" added on to my loan principal for some (maybe all?) of my loans the day that the loan hit my bank account.