How to Start Paying on My Student Loan While I'm in School

Paying student loans while still in school is advantageous for a few reasons. First, it helps you pay down the debt faster, saving you money in interest charges. It also gets you accustomed to making regular payments on your debt and develops financial responsibility and good financial habits before you enter the real world after graduation. Beginning to make payments on your student loans while still in school gives you a leg up on many other students who wait until after graduation, starting their professional lives in debt.

Instructions

1

Calculate a budget. Most students live off measly monthly budgets with little money to spare. Determine what your living costs are and how much money you have left over each month or how much you can afford to pay each month without getting yourself in financial trouble.

2

Calculate your interest. Use this number as a base for how much you should pay each month. Even if you pay only the monthly interest charges, you are saving yourself a lot of money in the long run. To calculate your monthly interest, multiply your student loan interest rate percentage by your loan balance, and divide that by 12. For example, if you owe $5,000 with a 4 percent interest rate, multiple 5000 by 0.04, and divide that by 12, for a result of about $16.67 a month in interest charges. Pay this amount, or round it up to $20, as a realistic payment amount. If you do not pay this amount, your loan will be approximately $800 more than the original loan amount after four years of no payments.

3

Determine if there are ways for you to cut out any monthly expenses, and use the money you save to pay off your loans. For example, if you rent an apartment and have extra space, consider looking for a roommate to lower your rent and utility payments.

4

Look for part-time work you can manage without falling behind on schoolwork. Find work that fits into your class schedule. For example, if you have class during the day, try waiting tables or bar tending for a few hours a night, a few nights a week. Or, check with the campus employment department for any availability. On-campus jobs may have tax benefits, saving you more money that you can use toward paying off your loan.

5

Check to see if your school offers any student loan payment programs. For example, University of California, Los Angeles, and other schools offer a pay-as-you-go program, which allows students to create realistic budgets and set up payment plans that work for their personal financial situation.