Many aid packages include Direct Loans, which may be subsidized or unsubsidized. The difference is simple: with an unsubsidized loan, interest accrues starting on day 1 of the loan even if you choose to defer while in school. With a subsidized loan, no interest accrues while you’re in school whether or not you make payments.

Four years of accruing interest can result in a substantially higher loan balance upon graduation than the student intended. For example, freshman year’s $5,500 at the current 4.29% interest rate would accrue $1,164 in interest. That unpaid, accrued interest is capitalized or added to the outstanding loan balance, resulting in a balance of $6,664 upon graduation. Add each year’s loan to that total and it’s easy to see how debt can quickly balloon. And if you enter an income-based repayment plan upon graduation and your initial payments are less than the monthly interest accruing on the loan, your balance will continue to grow.

So, if loans are a part of how you’ll pay for college, you need to factor payments during the school years into your overall college cash flow plan, or plan for higher future loan payments if you don’t.