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During FY 2010, the President signed into law the Improper Payments Elimination and Recovery Act (IPERA, Public Law No.

111-204), which amends the Improper Payments Information Act of 2002, and repeals the Recovery Auditing Act (Section 831 of the FY 2002 Defense Authorization Act, Public Law No. IPERA significantly increases agency payment recapture efforts - by expanding the types of payments that can be reviewed and lowering the threshold of annual outlays that requires agencies to conduct payment recapture audit programs.

At that point, any future interest that accrues will be based on the new outstanding principal amount (previous principal balance plus capitalized interest).

Therefore, you pay interest on interest and capitalization increases the total cost of your loan.

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