Section 14.43.165 - Interest(a) The corporation shall set the rate of interest on a loan made under AS 14.43.161 - 14.43.168 in accordance with federal and state law. Interest on a loan made under AS 14.43.l61 - 14.43.168 may not exceed the rate specified by the applicable provisions of the federal guaranteed student loan program. Interest on a loan made under AS 14.43.161 - 14.43.168 accrues from the time that the loan is disbursed.(b) A borrower may elect to make payments of interest that is payable during the borrower's term of attendance at the postsecondary institution or during certain deferment periods authorized by the commission; however, the commission shall capitalize any unpaid interest as part of the principal to be repaid as agreed, or upon graduation, withdrawal, or completion of the deferment period.(c) Notwithstanding the provisions of (b) of this section, if a borrower qualifies for a subsidized loan under the federal guaranteed student loan program, the interest on the loan is paid by the federal government during the borrower's term of attendance and any qualifying deferment and grace periods authorized under the loan.