Is It Better To Defer Student Loans, Or Pay Them Back During School?

As a general rule, it is always better to pay back your loans as quickly as possible instead of opting for loan deferment. But “general” doesn’t apply to everyone.

A stopwatch sitting on top of money.

Why You Should Pay Back During School

Paying back your loan while you are still in school gives you the benefit of eliminating, or at least greatly reducing, your student loan debt upon graduation. Moreover, by paying off your loan earlier, you don’t have to worry about the interest accruing quite as much. The sooner you pay off your loans, the lower the accrued interest, which means you will be paying a much lower cost for your loan as compared to students who choose to defer. Overall, you would save yourself a good amount of money.

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Why You Should Defer

Of course, if it were that simple, all students would choose loan deferment and there wouldn’t be this huge nation-wide discussion about student loan burdens. The fact is, paying back student loans while you are in school involves working while you study to earn some money towards the early payment. Not everyone can juggle a job (or jobs) and studies successfully. College coursework can be quite rigorous and trying to manage both can be an ongoing struggle resulting in early burnout. Besides, it may push back your graduation date as you are more likely to take longer to complete your coursework. Deferring grants you the option to delay payment, and focus instead on your college years.

So should you pay your loans back during school? It may not be the right choice for all students. You should choose this option only if you are confident in your ability to balance work and school without burning out.

Use College Raptor’s new Student Loan Finder to compare lenders and interest rates side by side to find the ideal student loan—for FREE!


Lender Rates (APR) Eligibility
Earnest company logo.
Variable APR: 1.74% - 5.64%*
Fixed APR: 2.44% - 5.79%*
Undergraduate and Graduate
Lendkey company logo.
Variable APR: 1.90% - 5.25%*
Fixed APR: 2.49% - 7.75%*
Undergraduate, Graduate, Parent PLUS
Credible company logo.
Variable APR: 1.80% - 9.99%*
Fixed APR: 2.15% - 9.99%*
Undergraduate and Graduate
Laurel road company logo.
Variable APR: 1.89% - 5.90%*
Fixed APR: 2.50% - 6.00%*
Undergraduate and Graduate
Commonbond company logo.
Variable APR: 1.98% - 7.04%*
Fixed APR: 2.59% - 6.94%*
Undergraduate, Graduate, Parent PLUS
Fixed APR: 2.44% - 6.22%*
Undergraduate, Graduate, Parent PLUS
VISIT ISL Education Lending
Variable APR: 1.87% – 6.52%**
Fixed APR: 2.30% – 5.96%**
Undergraduate, Graduate, Parent PLUS
VISIT Nelnet
Variable APR: 2.94% - 4.79%*
Fixed APR: 2.99% - 4.89%*
Undergraduate and Graduate
VISIT College Ave
Variable APR: 1.86% - 6.01%*
Fixed APR: 2.47% - 5.99%*
Undergraduate and Graduate, Parent PLUS

*APR includes a 0.25% interest rate reduction for enrollment in automatic payments.

**Interest rate reduction of .25% for automatically withdrawn payments from any designated bank account (“auto debit discount”). Auto debit discount applies when full payments (including both principal and interest) are automatically drafted from a bank account. The auto debit discount will continue to apply during periods of approved forbearance or deferment if the auto debit discount was in effect at the time of receiving the forbearance or deferment. Auto debit discount will remain on the account unless (1) the automatic deduction of payments is canceled or (2) there are three consecutive automatic deductions returned for insufficient funds at any time during the term of the loan.

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