Student Loan Payments While In School

Student loan debt is a serious problem. The average student graduates with $30,000 to $40,000 of debt; and that number can be even higher for graduate students. However, there is some good news: If you are enrolled in school at least half-time (i.e., minimum 12 credit hours per semester), your loan payments may be deferred while you are in school! This means that your payments will not need to be made until after graduation or dropping below half-time enrollment status.

Student Loan Payments While In School

Student Loan Payments While In School

Deferment: You are not required to make payments on your federal student loans while you’re in school. However, interest will accrue on unsubsidized loans during this time and is added to the principal balance of your loan when you graduate or leave school.

Interest Only Payments: Some lenders offer payment plans that allow for interest only payments for up to 12 months after graduation. This option does not reduce the amount owed on your student loan, but it can help prevent defaulting if you have difficulty making payments during this transition period.

Loan Forgiveness: There are several programs available that allow borrowers to have their loans forgiven after working in certain fields or serving a specific number of years in public service positions. Most require repayment of some portion of the loan before forgiveness becomes possible (for example 10% per year). Check out these links for more information: https://studentaid.edccollegeinfo/repay-and-forgive/loan-forgiveness/.

The Good News!

There’s some good news: if you’re going to school, the federal government has a plan for helping you pay off your student loans. You can defer your payments while in school or make interest only payments. If you do any of these things, the government will help cover the costs of interest. That means that when your loans come due, it won’t be nearly as much money as it would have been otherwise. Plus, if you’re having trouble making payments on all of your bills, let me give you one more reason why this is such a great option: not only will they help cover interest costs but also reduce them by providing a tax refund!

What You Need to Know About Your Student Loan Payments While in School.

If you’re in school and have student loans, you may be wondering what to expect when it comes to making regular payments. You might be thinking that your loan servicer won’t take your calls while you’re in school or on an approved leave of absence.

  • Deferment – If your loans were disbursed before July 1, 1993 and/or are not eligible for repayment under an income-driven repayment plan, they may qualify for deferment. This means that interest will not accrue on subsidized loans while they are in deferment status and no payments need to be made during this time period. For unsubsidized loans (those where the government does not pay the interest), interest will continue to accrue during the deferment period.*
  • Forbearance – Typically used when a borrower is facing financial hardship like unemployment or other financial difficulty; forbearance allows borrowers to temporarily postpone their monthly payments but doesn’t forgive any debt owed by either party.*
  • Deferments – For students with Federal Perkins Loans who are enrolled at least half time (as defined by their college), those loans can be deferred until after graduation from school provided certain conditions apply:

➤ The borrower is not currently delinquent on his/her student loan(s)

➤ He/she has made satisfactory academic progress towards completion of his/her program of study

Are all student loans deferred while you are in school?

Most federal student loans are deferred while you are in school, but some private student loans may not be. If a private loan is not deferred, this can still be an excellent option if your credit is good and you have a co-signer who can be held responsible for the debt.

In order to qualify for deferment, you must meet all of the following criteria:

  • Your federal loan payment plan requires that at least half of your income come from part-time work that has been verified by the school; or
  • You are enrolled at least half-time in an undergraduate program; or
  • You are enrolled at least half-time in an approved graduate program.

What types of loans do not have this luxurious benefit?

  • Federal loans
  • Private loans
  • Loans from foreign countries

Are there any benefits you may be missing out on from deferring your payments?

While deferring your payments can help you keep up with your education and avoid defaulting on your loans, it does come at a cost. Your interest rate may be higher than if you weren’t in school. If you’re enrolled in an income-driven repayment plan, the amount of interest capitalized each year will be added to the principal balance of your loan (instead of being paid off by monthly payments). This means that when it’s time to start making payments again on your federal student loans, they’ll be even bigger than they were before. And once those loans are forgiven under PSLF or Perkins Loans cancellation programs, any remaining balance is treated as taxable income (which could mean paying tax on money that has already been paid off).

In addition to this downside of deferment options:

  • You may have to pay taxes on the interest accrued during periods when you’ve chosen not to make regular payments on your federal student loans;
  • You may also be charged late fees for missing payment deadlines—these vary depending upon which institution holds the debt and what type of account it’s associated with (student loan vs credit card);
  • Finally, if there are penalties associated with defaulting on these types of obligations there may also be additional costs associated within order for them not being met due date etcetera.”

Making Interest Only Payments Towards Your Student Loans.

Making interest-only payments towards your student loans.

  • While in school

If you are enrolled in school and have been making monthly payments on your loans, there is a chance that your lender will allow you to make interest-only payments on the amount due while you are still enrolled. This is referred to as being in a grace period of a deferment or forbearance. This means that while you’re still in school and making those monthly loan payments, the lender will only charge interest rather than require payment on the entire amount owed. It’s important to note, however, that this option only works if you have no other outstanding balances with the same lender, otherwise they won’t allow it because they don’t want their accounts getting too confusing (and we can’t blame them).

  • On a grace period

A grace period is when any balance due before graduation can be paid off without penalties for late or missed payments during an allotted time frame following graduation (usually six months). In most cases this will mean not having to pay anything extra since there’s no new money being added onto what was already owed prior! Some private lenders may even offer longer grace periods if needed (e.g., up until three years after leaving school), so always ask about yours beforehand just in case!

Do not let your student loans drag you down!

You should make every effort to repay your student loans. Not only are they an investment in your future, but a good credit history can also help you secure a loan for a home or car in the future. Be aware that the government has a number of programs and laws to help those with student loan debt, including deferments and forbearances. If you are unable to pay back your loan immediately after graduation, you may be eligible for one of these programs and should explore them as soon as possible.

The federal government offers several ways to lower monthly payments on federal loans such as income-driven repayment plans and forgiveness programs. Income-driven repayment plans are flexible options that allow borrowers who have high debt balances and low incomes to reduce their monthly payment amounts by extending their periods of repayment from 10 years down to 30 years or more depending on circumstances (e.g., economic hardship). Income-based repayment plans also cap monthly payments at 15 percent of discretionary income each month – meaning any amount beyond that will be forgiven over time if certain requirements are met (e.g., 20 years under PAYE). Depending on how much money is owed each year along with other factors such as family size it could take anywhere between 25 – 35 years just before having any balance left over!


We hope you have a better understanding of how to manage your student loans while attending school. If you have any questions, please contact our Student Loan Specialists at 1 (800) 523-7493. They are available 24/7 and can help you find the right solution for your needs.

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