Learn about student loan interest

It is estimated that seven out of every 10 college graduates have some amount of student loan debt. This number is only going to keep growing as the cost of college continues to rise.

Many students are shocked at the amount of money they owe after graduation and don't have a plan for repayment. It is common for them to think because they took out X amount of dollars, that is exactly how much they are responsible to payback. What they're forgetting about, however, is the interest.

At some point, depending on the type of loan, interest will begin to accrue and capitalize. This means that each month the new interest that is charged to the borrower will be based on the principal balance of the loan as well as any accumulated interest.

For subsidized loans, the government pays the interest while the student still is in school. For unsubsidized and most private student loans, interest accrues while the student still is in school. In the latter case, paying accrued interest while in school can be extremely beneficial to reducing the overall amount that needs to be paid.

Capitalizing interest can cost the borrower thousands of dollars if they aren't working to pay it off during school.

For example, if you are the average graduate with $30,000 in debt upon graduation. And, you didn't pay any of your student loan interest over your four-year education. Then all of the accrued interest would have been added to your total loan balance.

Assuming a 6.5 percent average interest rate and monthly capitalization, this graduate will expect to pay about $4,300 extra during the life of his loan. This is in addition to regular principal and interest payments.

If students work to make payments toward their interest while still in school, even if it isn't for the full amount, they can substantially decrease the total amount they'll be paying over the life of their loan. Each dollar paid will reduce the amount of interest that compounds and will save the borrower money for all future months during the loan term.

Finally, some lenders will offer discounts to students who make interest payments while in school. Though the amount differs depending on the lender, an average discount is around 0.50 percent. Half a percent may not seem like a lot but when you start dealing with tens of thousands of dollars, it really is!

While paying your interest is definitely beneficial, it may be easier said than done. Most college students are broke as is and many don't have the money to put toward their student loans. Luckily, there are tons of jobs and opportunities both on college campuses and online that can help you earn some extra cash. Here are some of the best options:

' Jobs on-campus - There is a seemingly endless supply of jobs on almost any college campus. Whether you work at the library, at the dining hall, for the alumni or financial office, or something else, you can earn some easy money from a job with flexible hours.

' Freelancing - Most people have heard about freelancers but don't know how they could join the movement. There are websites like Upwork (formerly Elance) and Freelancer that allow companies to post jobs for virtually anything. From content writing, to graphic design, to video production - the opportunities are endless. If you have a skill, chances are you can get hired as a freelancer.

' Make Money Online - There are hundreds of ways to make money while just sitting in front of your computer. You can take surveys, use certain search engines, test websites, or even get paid for tweeting, blogging, and posting pictures. Though the payouts may not be substantial, every little bit counts!

Taking out student loans is scary. Thinking about how you're going to pay them back is even scarier. Though you may have less money for entertainment, drinks, and partying - but paying off your accrued student loan interest while in college truly can save you thousands in the long run. It is one of the smartest moves you can make in college and you will thank yourself later!

' Nate Matherson is a co-founder and CEO at LendEDU, a marketplace for student loans and the student loan refinance that began in the Iowa Startup Accelerator in Cedar Rapids. Comments: nate@lendedu.com