Interest begins to accrue when the loan is disbursed (except on Direct Subsidized and Perkins loans until repayment). The Principal is the actual amount borrowed; the Interest Rate is the amount charged by a lender to borrow; and Capitalization is unpaid interest that is added to the principal.
You can calculate the amount of daily interest by using the following calculation: (Current principal x interest rate)/365.25
The amount of interest that accrues on the loan is based on the amount borrowed, the interest rate, subsidies (government pays interest during specific periods of time), and the length of time to repay.
Reduce the total amount of interest paid by making payments when not required (during grace, in-school deferments, etc), setting up automatic payments which may come with an interest rate reduction, and paying more than the minimum monthly payment (there is no pre-payment penalty on student loans).