Benefit from Paying Interest While You are in School
Did you know that you can make payments on your education loan while you are still in school?
While you're in school, grace and any deferment periods, the federal government pays the interest on your subsidized Stafford Loan. You are not required to make any payments during this time, but if you choose to, the amount is applied to reduce the principal balance. You can make any size payment whenever you want to.
The interest on an unsubsidized Stafford Loan is charged to you while you're in school, grace and any deferment periods. You can opt on the Master Promissory Note to pay the interest quarterly or wait until you graduate. If you wait, the interest will be capitalized prior to the start of repayment.
Here is how you can save MONEY!
Pay the interest on a unsubsidized Stafford Loan for 4 years while in school and SAVE.
| Amount Borrowed | Payments Made | Interest Saved | Total Debt Reduction |
|---|---|---|---|
| $10,000 | $ 3,838 | $ 1,700 | $ 5,538* |
| $15,000 | $ 5,757 | $ 2,500 | $ 7,972* |
| $20,000 | $ 7,296 | $ 3,342 | $ 10,638* |
| $25,000 | $ 9,120 | $ 4,177 | $ 13,279* |
| $35,000 | $ 12,768 | $ 5,847 | $ 18,615* |
*approximate values, assuming a fixed interest rate of 8.25%
By paying just the interest on your unsubsidized Stafford Loan while you are still in school, you will end up with a smaller loan when you graduate and pay less interest during the life of the loan.
National Education sends quarterly statements detailing interest charges. You can send us a check to pay any of this interest at your convenience or you can elect to not pay interest while in school. Any amount paid above the interest owed will be applied to reduce the principal balance.
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