Should You Pay Your Student Loans While in College?


The weight of paying off student loans bears heavily on every college student’s shoulders. How we can pay them off and when we should start doing it is debatable. If you have extra money at the end of the month, whether from your work-study job or another part-time job, putting a little toward your impending loans may cross your mind. This may or may not be the right option for everyone. Understanding the pros and cons of making early payments will help you make a decision that is right for you.

The Pros

Lower Accrued Interest 

The first big obvious advantage is that if you decide to start paying off your student loans whilst you’re in college, the lower the accrued interest amount will be. This means you’ll be able to pay off your loans earlier. This allows you to save a substantial amount based on the interest rates only. It also relieves the stress of the ticking time bomb that sets off once you graduate.

You may think that the amount saved on interest rates is not substantial, but once your grace period is over, your total loan amount may increase and surprise you. This is because it includes the capitalized interest accrued during your education and grace period. By making an effort to pay off your interest monthly, you’ll reduce the cumulative amount you’ll owe after college.

Debt to Income Ratio

Early payments also help to lower your debt-to-income ratio, which increases your likelihood of getting approved for a mortgage or any other loan after you graduate. And most importantly – peace of mind from being debt free. 

The Cons 

The Time, Focus and Dedication

If you wish to start repaying your loans, you have to have an income and to have an income, you need a part-time job. This will take time and attention away from your studies, which can affect your grades. Whilst many college students do work part time, most of their income goes towards their living expenses or tuition. Therefore, if you wish to pay off your students loans whilst you’re studying, you’ll have to find a good job which allows you to comfortably do so whilst keeping your mental and physical well being in mind.

The Stress, Anxiety and Pressure

College itself is a hotpot of stress and anxiety and the current pandemic hasn’t helped to reduce it. Between classes, study, activities, hanging out with friends, and part-time jobs, adding student loan repayments on top of it can add to a student’s nerves. While some students need that 6-month grace period, others can handle the balancing act while they’re still in school. This depends on you as an individual and how much you can take on your plate without going crazy.

Depends on the Type of Student Loan You Have

Making payments toward your federal student loans during school will not count towards your student loan forgiveness at the end of a repayment program. It will lower the total amount or the interest. It’s important to consider the type of federal student loan repayment plan you want to strive for when your grace period is over. Making payments now may lower the amount you pay every month for the repayment plan you want to aim for; however, it’s ultimately not necessary.

Get money today with our instant loans