Leveraging your Student Loans Against Each Other

With the popularity of my last post about student debt, I decided to write another post discussing the topic.



Last year, I was put in a bad position with my student loans. I couldn't work full time and take classes full time while maintaining my GPA as I did in the past. I had to make the decision to take out private loans to pay my rent with - bad decision. These loans carried a high interest rate, a few points above the standard govt loans.



However, this year everything is turning for the better. Since I am now 24, my FAFSA can reflect the accurate economic data of myself being financially free of my parents. This year I have received a nice amount of Federal grants/loans which I can use to pay off private loans as well as school. This will save me money in interest payments in the long term. With hypothetical numbers:

Private Loan: 7%
Govt Loan: 3%


I will take the govt. loan out to repay my private loan. I am also aggressively paying down these loans as I work this summer. While I could use the traditional 10 year payment plan, this is a rediculous idea for an overachiever such as myself. Can you do the same?