Prepayment

As a borrower, you may prepay all or any part of the unpaid student loan balance at any time without penalty. Payments will be applied first to any accrued unpaid interest and fees with any remaining amount applied to principal.

  • Direct Subsidized/Unsubsidized, FFEL Stafford, PLUS, and alternative loan servicers will provide assistance regarding payments made during grace and deferment periods. Log in at nslds.ed.gov and review the details for each loan listed for servicer contact information
  • For Perkins, Nursing, and SPU Institutional loans, contact Student Financial Services for payment information during grace and deferment periods.

Interest begins to accrue on Unsubsidized Direct, FFEL Stafford, PLUS, and alternative loans at disbursement. You may choose to pay the interest as it accrues or, if you choose to let it accrue, it will be added to the principal balance of your loan when it enters repayment in a process called “capitalization.”  Capitalization increases the total cost of your loan. 

For example, on a $3,500 loan with an interest rate of 6.8%:

  • If you paid the $19.83 interest each month while in school, you would pay a total of $950 in interest over the life of your loan. (Length of repayment: 7.5 years.)
  • If you did not pay any interest on the same loan while in school, you would pay a total of $1,486 in interest over the life of your loan. (Length of repayment: 9.6 years.)