Paying Off Your Student Loans While In School: Strategies For Getting Started

Mike Brown Updated on May 13, 2019

Today, more and more smart college students are making efforts to attack their student loan debt while they are still in school.

Why? Because even small amounts of money applied to pay student loans while in school can save thousands over the repayment lifetime after graduation. 

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You don’t have to pay on your student loans while you are in school. But if you choose to do so, you’ll be able to chip away at debt early and make those loans more affordable.

Try these strategies:

Pay down the interest

Unless your federal student loan is subsidized, it accrues interest right away. In addition, if you don’t pay that interest as it accumulates, it’s capitalized. That means the interest is added to the amount you borrowed and that new amount earns interest, too.

In effect, you will pay interest on top of interest.

But you can exercise your option to pay that interest while you are in school. To do that, reach out to your loan servicer. If you don’t know how to do that, contact your school’s financial aid department or go online to the Federal Student Aid website.

Return refunds

Many people actually end up borrowing more than they need for school.

If that happens to you, your school’s financial aid office will send you a refund check for unused federal loan funds.

Think twice before cashing that windfall. Instead, return that refund and you will whittle down your student loan debt painlessly. Options vary on how to return a refund check, so talk with your financial aid department first.

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Readjust loan amounts

It’s a good practice to only borrow the least amount of money possible to meet your needs.

If you find that you have borrowed more federal aid than you actually need, you can cancel it.

Each time your borrowed money is disbursed, you will receive a letter with details about when you can cancel or reduce your loan amount and what to do so your school sends back that money on your behalf.

Think strategically about paying off student loans

To better understand the importance of putting something toward your student loan debt while you're still in school, see what your repayment might look like when you graduate.

The U.S. Department of Education offers a free online repayment estimator. As you create a workable strategy to pay student loans while you are in school, follow these tips to help you pay off loans faster.

Published in: Paying Off

About the Author
Mike Brown

Mike is responsible for the editorial and marketing direction of Nitro. He has a history of helping people through his educational background—first as a teacher at the Pennsylvania State University and then through 15 years of development and marketing of education programs. Read more by Mike Brown

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