Interest on your Unsub capitalizes each time a loan enters repayment which would begin 6 months after you stopped going to school. If you were to attend for 4 years with no breaks of greater than 6 months then your interest on your Unsub would capitalize 4 years and 6 months out. I wouldn't be in a rush to pay it. I'm not sure it would be an advantage to borrow more to pay interest on it for a tax deduction. Keep in mind that once your combined income hits around $110,000 the deduction starts to phase out. What I would do is simply do a 1040 both ways and see if it's worth it. Student loan interest paid by you is also any loan fees charged by the lender and not just the interest accrued so you may already have a deduction just from the fees alone, albeit small.
You may also be eligible for an education tax credit (
www.irs.gov find form 8863 for a lifetime learning credit. There's also a tuition deduction up to $4000 but you'd need to look at tax stuff for 2005 to find info-- the IRS printed 2006 tax stuff before the deduction was reauthorized so you won't find anything in 2006). The tax credit or deduction may wind up simply nullifying your federal tax liability to begin with.
The beauty of federally backed loans is not the rate which most students miss and I'm not sure why my profesion can't get past the "don't borrow, don't pay interest school of thought. Any federally backed debt you have is forgivable upon your death of total disability (no risk to your spouse). It is also very flexible when payback time comes. For example: you have a mortgage for $200,000 at 5.75 and federally backed Sub/Unsub for $150,000 at 6.8 and you are out of work for 4 months. A mortgage doesn't care: you owe the money and it has to be paid and if you don't, your house is sold to someone who can. With your federally backed loans it is highly likely you could request a forebearance for several months (no payments due) until you got back on your feet. Yes, you would be responsible for the interest but your life isn't ruined. Sub/Unsub come with several repayment options as well. I would be whacking my money into my mortgage and not my federally backed higher rate loan--- weigh the risk factor and insurance costs for the mortgage and not just the rate.
Consider a longer ranging plan... If you are in school for 4 years, have you anything in retirement? If not, maybe borrow a bit more so your husband can take some of his income and contribute to a Roth IRA on your behalf... It's pretty much what I would discuss with my DMD kids in your position. It is highly likely that your combined income after you graduate will preclude you from a student loan interest deduction and a Roth as well.
There's always the house fund... Would you be better off in the long term leaving school with a good sized down payment for a house and not have to pay PMI (private mortgage insurance) or do an 80/20 split and entering the market several years earlier or graduating, working and saving for a few years and then buying? I realize the mortgage interest is deductible but again, weigh the risk of the debt and take into account it is most likely an appreciating asset that could be liquidated or leveraged against if need be.
In short: think a bit more long term about borrowing and weigh the risk and not just the rate, deduction etc... Know why you are borrowing and keep that goal in mind.