Thankfully, there is an option available to those that want to avoid the extra cost of capitalization: you can make “interest-only” payments while you are still in college. While this might mean getting a small side job (many students have one of those already) and diverting some of your extra spending money, it can end up saving you a decent amount of money in the long term. If you are considering making interest-only payments, make sure to contact your loan servicer so they can provide you with the exact amount of interest accrued each month.
Example: To give an example of what this would look like, let’s suppose there are two students who each borrow a total of $20,000 ($5,000 a year) in direct unsubsidized loans at 3.76% for a four-year college degree.
Example: To give an example of what this would look like, let’s suppose there are two students who each borrow a total of $20,000 ($5,000 a year) in direct unsubsidized loans at 3.76% for a four-year college degree.
