Most private student loan lenders offer several options for repayment during the in-school and grace periods. Many lenders give borrowers the option to completely defer, or postpone, payments until after graduation or when enrollment drops below half-time. This lets the borrower avoid paying for the loan while they’re in school, but means that the loan’s interest will accumulate (and possibly compound) until they graduate.
It can often be worthwhile to make small payments or interest-only payments on a loan while you’re in school, even if they aren’t required, to try to reduce the amount of interest that accrues. Some loans require fixed payments or interest-only payments while the borrower is still in school. Many loans also have a grace period (usually six months) after you graduate or go below half-time. After the grace period is over, you will be required to make full payments. Some lenders provide discounts, such as small interest-rate reductions, to borrowers who agree to make fixed, interest-only or full payments during the in-school and grace periods.