Beyond the financial benefits to making early payments, there are mental advantages, too. Rubin at Edvisors says that starting payments early is a way to establish good financial habits before real life hits.
“If you are making payments, you are already establishing a routine,” she said. “It’s also a constant reminder that it’s not free money.”
Michelle L. also graduated in 2014, from a small liberal arts college outside of Boston. She started making payments on her $25,000 student loan debt right away because she started her first job three weeks after graduation.
Miranda Marquit, a financial expert and senior writer at Student Loan Hero, said that making payments right away can also help new graduates adjust to their new budget.
“A lot of people adjust to their lives in the six months before they have to start making those student loan payments,” she said. “So when they have to start them, it’s like a slap in the face.”
For Michelle, who also asked that her last name not be used, paying back student loans early was important because she knew she wanted to go back to school. Today she is a graduate student at the University of Michigan. In the two-year gap between her undergraduate and graduate degrees, she was able to pay off $14,000 of student loan debt.
Now all she has left are federal loans, where interest will not accrue while she’s in school.
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