College  |  August 24, 2023  |  Rob Zodda

Benefits of making in-school payments on your student loans

What you'll learn
  • How you could save money on your loan by making payments in college
  • How paying student loans while in school can affect your credit

Let’s start by answering a common question: “Can I make student loan payments while I’m in college?” Yes, you can—and should seriously consider it. Here’s why.

Paying student loans while in college could save you money

By now, you’ve heard about interest. Interest is the cost you’re charged for borrowing money. Loans also list an “annual percentage rate” (APR). APR is like an interest rate, but it also includes all, fees, discounts, premiums, and more. It’s expressed as an annual percentage rate based on how long it will take to pay off your loan in full.

With many student loans, interest starts accruing—or adding up—as soon as your funds are sent to your school. The interest you’re being charged will build up while you’re in school, ultimately increasing the amount of money you’ll have to pay back. However, there are a few things to note:

  • There are two kinds of federal student loans: subsidized and unsubsidized. For subsidized student loans, the government covers the interest for you while you’re in school. For unsubsidized student loans, they don’t.
  • For private student loans, interest begins to grow as soon as the funds have been distributed to your school.

By making payments while you’re in school, you could help lower the total cost of your student loans. If you pay the interest—or even just a fixed amount every month—it could save you money in the long run.

Don’t think you can afford to make payments during school? Consider using your tax return, birthday money, or money from a side hustle. Every little bit helps.


Need money for college?

Consider a Sallie Mae® private student loan

  • Available for online or on-campus study
  • Competitive fixed and variable rates
  • No origination fee or prepayment penaltyfootnote 1
  • 97% of undergraduate students who’ve been approved were approved again when they returned with a cosigner the following yearfootnote 2 

You can make payments no matter what repayment option you chose

When you first get your student loan, you choose to either make in-school payments or defer (put off) making payments until after graduation or leaving school. Deferring payments can be helpful for people who can’t or don’t want to make regular payments during school. But with private student loans, interest continues to accrue all through the years you’re in school and you’ll end up paying more for your loan.

If you choose to defer your loan payments until after graduation, it just means that you don’t have to make payments while in school. But you’re absolutely allowed to make payments if you’re able. And that can help you save money on your total loan cost!

Making payments could help you build credit

Another benefit of paying student loans while in school is that it can help you build credit. Credit is the ability to borrow money, based on the lender’s belief that you can pay it back. Most students don't have much credit history, so paying your student loans on time is an opportunity to build it while in school.

Making payments on time, every time, is important to your credit health. It proves that you’re a responsible borrower and that you’re able to repay a loan. You’ll need good credit when you apply for things like a credit card, car loan, or mortgage.

Stay on track

By making student loan payments while you’re in college, you may be able to lower your total loan cost, make your post-school payments more manageable, and build credit.


footnote 1. Although we do not charge you a penalty or fee if you prepay your loan, any prepayment will be applied as provided in your promissory note: first to Unpaid Fees and costs, then to Unpaid Interest, and then to Current Principal.

footnote 2. Sallie Mae loans cover enrollment periods of up to 12 months. Students must apply for a new loan each school year. This approval percentage is based on students who were approved for a Sallie Mae undergraduate loan with a cosigner in the 2020/21 school year and were approved for another Sallie Mae undergraduate loan when they returned with the same or new cosigner in 2021/22. It does not include the denied applications of students who were ultimately approved in 2021/22.

footnote Sallie Mae does not provide, and these materials are not meant to convey financial, tax, or legal advice. We make no claims about the accuracy or adequacy of this information. These materials may not reflect our view or endorsement. Consult your own financial advisor, tax advisor, or attorney about your specific circumstances. Reproduction without explicit permission is prohibited.

footnote External links and third-party references are provided for informational purposes only. Sallie Mae cannot guarantee the accuracy of the information provided by any third parties and assumes no responsibility for any errors or omissions contained therein. Any copyrights, trademarks, and/or service marks used in these materials are the property of their respective owners.