<p>If a student were to begin repayment of the federal perkins loan or direct subsidized loan while in college, does interest begin to accumulate or only 6-9 months after graduation?</p>
<p>Why exactly would you want to pay it off during college? You aren’t paying interest, so I don’t think there would be any particular benefit to start paying if off that early. </p>
<p>Anyways, I’m fairly certain interest payments begin as soon as you being to repay the loan, if you’re doing it that early.</p>
<p>Because my parents were considering getting the loan through me-interest deferral, I was curious.</p>
<p>Either way, there’s really no reason to pay if off early, as far as I know. If your parents have the cash to pay off the loan, might as well put it away and let it accumulate some interest of its own until you’re done with college at which point they can pay however much they want.</p>
<p>what do you mean “let it accumulate some interest of its own.”</p>
<p>If your parents were to pay off a subsidized loan (sub Stafford or Perkins) before it becomes due (6 months after graduation/leaving school/dropping below half time for Stafford, 9 months for Perkins), they would be paying it off debt-free. If they wait to pay it off just before it’s due (that is, just before it starts to accumulate interest), they can save that money in an interest-bearing account & actually earn a bit of money while they wait to pay it off. That’s what “let it accumulate some interest of its own” means.</p>
<p>But to answer your original question, they can pay it off early at any time. They would be paying the principal on the loan (the original loan amount), since there is no interest yet & won’t be even if they start to pay it early. Early repayment won’t trigger the start of interest. I see no problem doing this, because even if they don’t pay it all, at least you will owe less when it comes time for the repayment period when interest DOES start to kick in (the 6 months/9 months referenced above).</p>
<p>“Anyways, I’m fairly certain interest payments begin as soon as you being to repay the loan, if you’re doing it that early.” This is incorrect. Interest still is deferred even if you begin to voluntarily repay early.</p>