But if you've
got subsidized federal student loans (Perkins, Direct, or Stafford) then deferment is your best bet if you meet the eligibility requirements: Any interest that accrues on these loans during deferment is paid for by the federal government.
For
subsidized federal student loans, deferring if you're eligible is ideal, since you can avoid accruing interest during that time.
And if you have
any subsidized federal student loans, you do not accrue interest while you are still in school or during the grace period after graduation.
It's possible you have
subsidized federal student loans with rates as low as 3.40 % APR..
The IBR, PAYE, and REPAYE plans all offer a benefit where if you are negatively amortizing, the difference between your payment amount and the monthly interest accrual will be waived for
your subsidized federal student loans for up to three years.
In other words, under these plans you will not experience any negative amortization on
your subsidized federal student loans for up to three years after graduating.
CU student loans» interest rates are somewhat higher than that of
a subsidized federal student loan.
You will then target your unsubsidized federal student loans before turning to
your subsidized federal student loans.
In this way, you will first pay off your private student loans, then your unsubsidized federal student loans, and last
your subsidized federal student loans.
Then, sort your spreadsheet so that
your subsidized federal student loans are below your unsubsidized federal student loans.
Because your student loans will continue to accrue interest during deferment (again, unless you have
subsidized federal student loans) or forbearance, this is generally not recommended.
Subsidized Student Loan:
A Subsidized federal student loan is a loan that does not accrue interest when the borrower is in school or when the loan is in a grace period or deferment.
If you qualify for
subsidized federal student loans, you won't have interest accruing while you attend school.
In addition, there are
subsidized federal students loans that help cover tuition and living expenses while you are in school.