Do I Have to Pay My Private Student Loans While I’m Still in School?

What do you do when your federal student loan doesn’t cover all of your college expenses?

Most likely you’ll turn to private student loan lenders like Sallie Mae, or a personal bank or credit union. While private student loans can help you cover all of your college costs, they can wreak havoc on your finances down the road.

That’s because private student loans aren’t regulated by any government agencies. So private lenders get to set all the terms and conditions on the student loans they offer.

Most importantly, private lenders get to decide when you actually have to start repaying those private student loans, regardless of your overall financial or educational situation.

Here are a few questions to keep in mind when reviewing private student loan repayment conditions prior to signing on the dotted line.

When do I have to pay?

Hopefully, you’ve read your loan agreement before signing and have an idea of when your private student loan repayment should start.

For federal student loans and most private student loans, repayment starts six months or so after you’ve graduated from college. This is typically the industry standard.

While student loans get you the money you need to pay for college, after you graduate you’ll be paying a lot of money in interest for loans you took out years ago.

Thankfully, most private student loans have caught on to the fact that students can’t pay while they’re still in school. However, some still do require in-school payments. Always make sure you read over your loan documents before you sign them.

What’s a grace period?

Most private lenders offer a six-month grace period after you graduate during which you don’t have to make student loan payments.

A grace period gives you a little time to get on your feet, find a job, etc. Check your loan agreement to see what kind of grace period you have.

You should use your grace period to your advantage by saving aggressively while you aren’t making monthly payments. Try and tuck away a few hundred dollars each month for your student loan payments. And don’t let lifestyle inflation set in.

Or, if you have the financial means, consider getting a head start on your student loan payments by paying them. Then, once your private student loan repayment period officially begins, you’re already a little bit ahead of the game.

Can I defer my student loan payments?

Deferment is another option for giving yourself more time before you have to repay your student loans.

It’s more commonly offered for federal student loans, but some lenders also offer deferment options for private student loan repayment if you meet certain criteria.

If you’re going back to school, have a limited income, or are enrolled in a certification class or in an internship,check with your lender to see if they offer deferment or forbearance options.

Just remember that interest is still accruing even when you defer payments. So do the math and make sure deferment is financially the best option for you.

Should I start private student loan repayment while in school?

While most student loans don’t require payments while you’re in school, that doesn’t mean that you shouldn’t start paying them off early if you can afford it.

One of the biggest reasons to start making payments on private loans right away is the interest.

On top of the principal of the loan, you’re also accruing interest every month even when you’re in school. That means you’ll be paying the principal, the interest, and the interest on that interest if you don’t start private student loan repayment early.

Paying off some of that interest while you’re still in college will also help your overall loan balance stay manageable. Plus, it will give you some relief when it comes to making full student loan payments after graduation.

Be your own advocate and make sure you fully understand what you are agreeing to when it comes to private student loan repayment before signing your documents.

Need a student loan?

Here are our top student loan lenders of 2018!
LenderRates (APR)Eligibility 

1 = Citizens Disclaimer.

2 = CollegeAve Autopay Disclaimer: The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. Variable rates may increase after consummation.
3.24% -
11.99%
1
Undergraduate, Graduate, and ParentsVisit Citizens
2.93% -
9.67%
Undergraduate, Graduate, and ParentsVisit CommonBond
3.54% -
12.66%
2
Undergraduate, Graduate, and ParentsVisit CollegeAve
3.98% - 9.07%Undergraduate and GraduateVisit LendKey
3.00% - 10.76%Undergraduate and GraduateVisit Connext
3.25% - 11.85%Undergraduate and GraduateVisit SallieMae
Advertiser Disclosure

Student Loan Hero Advertiser Disclosure

Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print, understand what you are buying, and consult a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time. Please do your homework and let us know if you have any questions or concerns.