What is the best financial strategy for paying back student loans?

Paying off student loans while deferred?

• My husband has previous student loans that I am trying to help him take care of while he's deployed. His payments are now up to date (did have a past due balance). However, I sent in an application for the civil rights thing, i forget what its called, so that his interest rate cannot raise above 6%. Some, ahem, not so smart employee put it in as a deferment instead. I was about to call to straighten it out but now i'm curious. Will paying off the loans while they're deferred save money in the long run? Will i just be paying on the principal balance while its deferred, so therefore the interest accumulating will be lower? Or am i better off to get them out of the deferment and keep paying monthly, and why? My husband doesn't know much about student loans but through helping him with his i'm learning a lot. This just has me stumped and I can find much info on the web. Thanks very much to anyone that can help. The next payment isn't due until mid January, but i'd like to sort things out before then so I can sign up for Quick Pay and lower the interest by .25% it's not much but if i'm going to take them out of the deferment i want it as low as possible :)

• Answer:

  If his loan is subsidized then the government pays the interest wwhil it is on a deferment. so you would be correct in that case, any payment would go towards the principle and save a lot of money.now if the loan is unsubsidized the interest still accrus, so it wouldn't make a difference.