Devetra C.





How good is it to pay back student loans while still in college?

Wanted to know if it was a good idea to start paying back student debt while still in school or should I wait until I finish? #debt #student-loans #personal-finance #financial-planning #student-loans #college

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That depends on the type of loan(s). Subsidized loans are loans that do NOT charge interest expense until after you have graduated (usually about 6 months after your graduation date). These are basically interest-free loans, so there is no need to rush to pay them back. If you have unsubsidized loans, then I highly recommend you pay at least the interest amounts while you are in school. With unsubsidized loans, interest starts accruing as soon as you take the loan out, and that can really add up and increase exponentially over time unless you're making the interest payments.

Your decision should also depend on your financial situation. If you have a lot of extra money and want to spend it on something, you will be much better off paying off your loans than, for example, buying a new car.

Best of luck to you!

Last updated Mar 07 at 10:12

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If you have the means to begin paying down your loans this might make sense for you if the loans are accruing interest every year - the sooner you start paying them down, the less interest will accrue. That said, as a student the opportunity cost of these payments can be high. I would advise considering strongly whether there are other ways you would like to direct that money as a student (study abroad?) that could give you experiences you won't get a second chance to go back and do. For Stafford subsidized loans (ones from the government that aren't accruing interest) it's probably in your best interest to not start paying those down until you graduate and they begin to accrue interest. (At the very least, de-prioritize these loans for repayment compared to interest-accruing ones)
Last updated Dec 06 '17 at 11:42

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