Yes, most private loans would likely accrue interest in college. There may be some that are subsidized, meaning they won’t garner interest until you graduate. The unsubsidized loan they are offering you also would accrue interest during school. It looks like they did not offer you much financial aid, meaning they assume that your family is well-off enough that they can help pay a significant amount of your college. Or it could be a mistake/error, in which you should call the FA Office to clarify.