Should I Make Student Loan Payments While I’m in School?

Facebook icon Twitter icon Print icon Email icon

By Chris Snellgrove

May 5, 2020

While English professors ask students to analyze Hamlet’s famous question “to be or not to be,” many of those students are grappling with a bigger question: to pay student loans or not to pay?

If you received student loans as part of your financial aid package, those loans will be deferred while you are attending school at least halftime. That means you don’t have to pay them back while you focus on your education.

Of course, the fact that you don’t have to make payments while you’re in school doesn’t mean you shouldn’t even consider it. To figure out whether you should make payments or not, you should consider the following factors. 

Are Your Loans Subsidized or Unsubsidized?

The first factor to consider is the type of student loans that you have. Do you have subsidized loans, unsubsidized, or a mix of both?

Subsidized loans do not gain interest while you are in school while unsubsidized loans do. This may influence whether you wish to make payments or not. 

For example, if all of your loans are subsidized, you don’t really “lose” anything by avoiding payments. You’ll owe the same on that loan at the end of your education as you owe right now.

Meanwhile, the interest from unsubsidized loans means you may owe thousands of extra dollars by the time you graduate. If you have unsubsidized loans, you should consider making payments on the interest before it gets out of hand.

But even if your loans are subsidized, there is no down size to paying while you’re in school, if you can afford it. It’s just that much less you’ll owe when you graduate.

What is Your Current Employment and Lifestyle?

 An obvious consideration regarding whether you should pay loans while in school is whether you have enough extra money to do so.

If you don’t have a job, then making early payments on your loans may be difficult or even impossible. And while you can try to get something like a work study job to help make payments, it’s important that you don’t hurt your academic career by splitting your focus.

Parental Assistance

It may hurt your pride, but if you’re really worried about growing interest, consider asking your parents for help if they are willing and able to help.

Many parents help directly pay for college with things like Parent PLUS loans. And others help more indirectly by providing free room and board at home for their children to study locally without having to pay for a dorm or an apartment.

Some parents may be working through their own financial struggles. But if your parents have enough discretionary income, they may be willing to help you pay down the interest on your unsubsidized loans.

Future Job Prospects

The final consideration is simple; what is life after college going to look like for you?

If you have solid job prospects and will likely be making a healthy salary, you may want to skip making payments early. An extra few thousand dollars in interest may not mean much when you have a good job, but an extra few hundred in monthly payments may mean the world when you’re still a student.

A good place to start:

See the best 529 plans, personalized for you