My son is graduating in May. The only loans he has are the federal loans, so around 25K.
He will be starting a fully funded PhD program in the fall with a small stipend. Our plan had been to pay off the student loans for him, but due to health issues this is no longer possible. He knew this from the beginning.
I know he can defer payment while still in school.
My question is, currently we could comfortable afford to make monthly payments for him. I was thinking that could be part of his graduation present. But due to health issues, not sure we can do all 4 or 5 years he is in PhD program. (I know it could be longer)
So if we start payment’s, will he be able to pause them later if he is still in grad school? Thanks for your wisdom.
His loan repayment can be deferred while he is in grad school.
Maybe you could start a dedicated savings account and put whatever money in that account so he can then use it to repay his undergrad loans when the time comes.
@thumper1 if we did that, wouldn’t the interest keep accruing? He is stressing out about the debt, so I would like to ease his mind some. Dedicated savings account would work, just not as well as starting to pay down debt.
Are all the loans unsubsidized? I think interest may stop accruing on any that are subsidized while he is in grad school (that is how my kid’s seem to be working). So maybe you/he could make some payments on the unsubsidized ones only?
@intparent
If the total loans are in the $25,000 range, then some at least are unsubsidized…and if the student didn’t have financial need…they all could be unsubsidized.
To the OP…you can make payments on the interest only for these loans while your kiddo is getting his PhD.
I think your son could put loans in deferment, but you are still free to make payments as you are able. I believe the accrued interest must be paid first, then payments may be directed to principle. Or you help out by paying the interest and he could tackle the rest when he is done with grad school. You should also be able to direct payments towards loans with highest interest rates, too. Not certain of details, but you should be able to get more info from lender.
Right, but my kid ended up with some of each, and we were borderline for getting need based aid or not. So it is worth asking if any are subsidized, and they may be able to let those ride while kid is in grad school.
I’m pretty sure it’s a mix of subsidized and unsubscribed. Will definitely look into it. Thanks for all the advice.
You can voluntarily make payments while the loans are in deferment. In fact, you can choose which loans you want to pay during that time, and you just pay when & if you want.
Pay the unsub loans with the highest interest rate first. Pay off any accrued interest before the grace period ends … that avoids capitalization of interest, which means that the interest rolls into the loans & you end up paying interest on the interest. If a student enrolls at least half time before the grace period ends on undergrad loans, he will have a grace period for them after he leaves the grad program (or drops below half time).