Want cheaper college? Pay interest while in school
By Eliza Haverstock, Kat Tretina | NerdWallet
A typical four-year degree can cost $115,000 or more, according to a 2023 College Board report. Borrowing money to pay for college adds to the total cost, due to interest.
Federal student loan interest rates range from 6.53% for undergraduate borrowers to 9.08% for parents. Private student loans have an even greater range, and the rate you get generally depends on your credit.
To lower the overall cost of your education, consider making optional student loan payments while you’re in school or during your grace period. Even if you can only afford a small amount, every payment you make will decrease the amount of interest that accrues. You could save thousands over the life of your loan.
“Interest begins accruing on most private student loans and some federal student loans as soon as students receive the money, even if payments aren’t due,” says Jill Desjean, senior policy analyst with the National Association of Student Financial Aid Administrators.