<p>Can you begin repayment immediately? Meaning while the student is in college?</p>
<p>Yes, you can. Many folks don’t because they need that money to pay for college and the loan is accruing no interest in college. But if your student took out the loan because of a short term need and doesn’t need any further loans and has the funds to start repaying, go at it.</p>
<p>why would you? it’s not accruing any interest. you’ve already paid a 3 or 4 % origination fee on it, you won’t get that back.</p>
<p>Some people want to pay it while they got it. If you take out a loan, say freshman year, because funds are tight, something going on with the family, but then you are flush the next or subsequent years, why wait till graduation when you may be underemployed to pay the loan? Parents are not interested in paying for college stuff once the college is done, believe me. Better to graduate debt free.</p>
<p>But you are looking for some accounting and record keeping headaches if you take out more loans after or during paying back this one, not to mention spending for any origination fees. So make sure you don’t need to take out more loans before paying back these. Otherwise it does not make sense.</p>
<p>Hmmm, you’ve given me something to think about. I am the parent but we will pay back this loan. Cash is tight but I don’t think it will be any more or less tight next year. So we were planning to take any subsudized money offered every single year. But we were also planning to start paying right away, $100 per month on the loan. Now I’m thinking that’s pretty stupid and we’d be better served to put away that $100 a month for future college expenses.</p>
<p>Thanks for helping me think this through! Any other input?</p>
<p>I would put the money away in account for any emergencies that come up. The only qualification would be is if you are right on the brink in qualifying for some need money like PELL and accumulating funds might put you over. Otherwise, pay the danged thing upon graduation since there will be no interest accruing on it. You might be able to avoid taking another loan by doing this.</p>
<p>I agree that if you are likely to be needing more loans in the future is is pointless to pay them back at this time.</p>
<p>
the origination fee on subsidized loans is around .5%</p>
<p>No we do not qualify for any grants. Our EFC was around $9000. Our entire “financial aid package” consisted of the partial bright futures award, $3,500 in subsidized and $2,000 in unsubsidized. That’s it. So any savings shouldn’t really effect anything I wouldn’t think.</p>
<p>You have my respect and admiration for getting your budget in place to even start repaying those subsidized loans now with your EFC. </p>
<p>The talk on the “streets” is that the subsidized loans interest rates are going to go up (for the rates after graduation) so that is smart to take what you can of them next year so that if you can’t pay them all by graduation, the rates are as low as they can be. There is a thread about this on the board, and I am just pulling that info, by the way. I have no personal knowledge of this. So that is some more info to consider after checking out the information to the source.</p>
<p>My daughter paid the interest on her unsubsided loan. She had the money and we thought it made sense. Any thoughts on doing this?</p>
<p>Definitely a good idea to pay the interest on unsub loans if financially feasible. That way the debt is not growing larger while in school.</p>
<p>You also should contact the college/university in question, and find out about the installment plans that are available for tuition and fees. You may be able to reduce the loan amount needed by going to an installment plan that takes into account $x that you can pay each month out of current income.</p>
<p>happymomof1…that’s exactly what I originally planned to do! That’s how this whole “take the loans and pay them back monthly” thing got started. I figured might as well take the no interest/no payments for 4 years money and make my own payment plan instead of doing the installments with the university. But now I’m thinking I should just take what I would have paid on it and put it in an account so that it’s available for future use. I’m very, very good about not touching money that is earmarked for something so I will have no problem actually setting the money aside. And then if in some wonderful turn of events we don’t need all of it, I"ll have a chunk to pay down the loan. It seems like a win/win to do it this way.</p>
<p>Thank you all for your advice and please keep it coming if you have other thoughts!</p>