jpomaikai

I have followed your website for a while now, and I have never seen a suggestion to "stay in school". For example, I had close to $80k in student loans, graduated and found a job, but maintained my status as a part time student in community college classes. The cost is minimal, classes are handled online, and I save thousands on interest. Is there any reason this has never been a suggestion for those looking to minimize their payments or pay down principal faster? Great work by the way, I read your newsletter weekly!

Will do! Like you, after coming to terms with my own student debt, I have dug into a lot of various options, and love helping others better understand the different alternatives!

With federal loans as I have seen, as long as you are a part time student, your student status is honored and your 6 month grace period will move to your new "out of school date" which will be the end of your semester. I am unsure about private loans, but I assume they will act similarly to unsubsidized loans, where interest will accumulate but not capitalize and payments are not "required" because of the in school status

The only issue is this sort of option has to be acted upon soon after graduation (i.e. if you graduate in Spring semester, you have a 6 month grace period during which you have to re-enroll as at least a part time student, so usually that means Fall semester). You must never let your 6 month grace period expire, or else your loans will be in repayment. Once your loans are in repayment, going back to school will only "pause" the required payments, but the interest will keep building (but possibly not capitalizing? don't exactly remember the rules). If you can maintain your student status, all of your subsidized loans will not accrue interest, and all of your un-subsidized loans will not be subject to capitalized interest. That's how I was able to get my loans under control: tackling the unsubsidized loans while the subsidized ones sat dormant! All because I stay enrolled as a community college student every other semester!

I have been a part time student for 2 years now. I have every right to "attempt" to further my education. I would ask you what exactly I am doing wrong? Is it a crime to attempt to take classes and subsequently fail them? The in-school status happens automatically, and is a part of the larger system, I have no direct control over it.