Managing loans during school…

Q. Does interest get charged on your student loans when you're in school?

A. Not if you're a full-time student holding only government student loans. But you will be charged interest if you're a part-time student with government loans or you're a student using a private student loan from a bank.

As of August 1, 2009, part-time students with government loans no longer have to make actual payments during school, however. Private student loans can have many different rules, so check your bank's requirements if you have these.

If you're required to make monthly interest payments, always make them on time every month to avoid problems with your loan. Just set up an automatic payment or mark it on your calendar.

Q. Do I need to do anything to manage my loan during school?

If you're using a private student loan from a bank, you'll normally need to keep up your monthly interest payment. But check to see if they will just add up the interest without requiring monthly payments.

If you're a full-time student with a government loan, you just need to check with your school Financial Aid office in case the government needs any other paperwork showing you're a full-time student. They used to require a confirmation of enrolment (Schedule 2) every term, but this may be easing for those who have a current full-time student loan.

But if you're not taking a government loan this term, you must submit proof of enrollment (confirmation of enrollment) to keep Interest-Free status on your loans. Otherwise, they'll charge interest and ask you to make loan payments while you're in school.

Part-time students with government loans don't get this Interest-Free status. The government charges them interest all through school. However, starting flal 2009, monthly payments during school are not required. So the money will add up, but you get to wait until later to pay.

Private or government loans, part-time or full-time, everyone should keep student loan lenders up-to-date with address changes or school transfers.

If your lender doesn't know what's going on with you, your loan could go into automatic repayment status while you're still a student.