Managing Student Loans During School - How to do that?

Managing student loans after can become quite hectic. To make sure that does not happen, there are various options that can be explored which are discussed here.

Updated by Chinmoy Dutta on 18th February 2020

Student Loans are a great option for students who want to study further but do not have the financial capability to do so. Both the Federal government and private lenders offer various student loans to borrowers at different interest rates. It is advised to look for the best student loans that one can get from either the government or private lenders. However, it is better to go for Federal Student loans since they provide many borrower benefits that private lenders cannot provide.

The biggest concern for a student, or parent, about college financing, is to keep student debt under control. Every student loan, apart from the subsidized federal student loans, starts gathering interest as soon as they are disbursed.

Student loans are growing more popular as the price of education keeps on increasing. Unfortunately, student loans are getting dangerous as people are getting into more debt than they can afford. There has to be a middle ground where students do not get into neck-deep debt but also manage to get to study in their dream institutions. It is advised to the students who are taking student loans to pay for their school fee, that they should start making interest payments during school

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Try making interest-based payments

Student loan repayment begins after the borrower completes their school. Most student loans offer a grace period after which the borrower shall start repaying for their loans. It is advised that students should start making interest-only payments during their school. It is not required but it is a good idea to do so because instead of letting the total amount grow, an interest-only payment can keep the balance at its original value

In this way, one can avoid debt growth resulting from compound interest. With the increase in borrowed interest, the total amount increases rapidly with compound interest. For students taking more than four years to graduate, the compounding interest can be especially crushing. 

Advantage of making interest-based payments

Making interest-only payments can help the students understand the future obligations they hold with their student loans and can also instill a sense of responsibility that they have to pay back their student loans. Once school gets over, the interest-only payments will prevent the student loan amount from growing each month. This could mean people with very high student debts can save interest on thousands of dollars and stay aware of their growing debt if they submit the interest-only payment timely. This can then avoid student loan balances growing by over a thousand dollars each month because of interest. Borrowers should try and avoid getting into such situations.

With each year of college that passes, total debt goes up, which means the total amount spent on interest will go up. This could be an excellent motivation for someone entering their senior year of college as it provides a good reason to minimize borrowing and it provides perspicacity as to the income necessary to manage the debt.

How to manage student loans if you don’t get a job?

Many people do not work after school and focus on their higher studies. This might make life difficult for students as they would require to pay for their college too. Still, some people choose to rely on student loan debts. Even if you do not have any source of income, making interest-only payments can still be a good idea

Students who are not working can take a loan large enough to pay for the interest-only payments as the semester progresses. This increases the loan count on a person but is still a smarter option than paying for the accruing interest which could lead to a larger loss. After graduating, when the bill starts coming in for student loans, students can realize how real the debt is. 

If one is in a habit of sending a cheque to their lenders, it reminds the reality of one’s situation and the financial situation becomes apparent. It is thus advised to develop good financial habits because it helps in future financial planning.


Student loan repayment seems to be the toughest phase of the lifetime of student loans. It is difficult to pay off student loans and get off the debt. But there exist many student loan repayment plans that can help pay off your debt faster. But to handle student loan repayment easily, it is always advised to start managing student loans during school itself. In that way, the total interest accrued is less since the interest is being paid off as soon as it accrues.