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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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Johannes’s Answer

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!
Thank you comment icon Great answer. I second this! It's great that you are thinking about starting to make payments. If you can, the most ideal situation is to do what you can to keep your student debt load low. Especially if you are going into a field that does not have high starting salaries. Shelby Pierce
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TJ’s Answer

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)
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Blake’s Answer

Hey Devetra,

The sooner you can pay them the better.

Thanks,
Blake
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Craig’s Answer

Hey, This is a great question. Many people do not even think about paying off college debt while in college. This is a great idea as it will have less time to accrue interest in which you will have to pay, for some loans they wont even start accruing interest until after you have completed college. This can be a very good opportunity to save some money in the long run!
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