Pay back loans or interest?

I am a sophomore in undergrad. I received $3.3K in partial refunds from my university for housing & meal plan. My parents have taken PLUS loans, and I have federal student loans (subsidized and unsubsidized) in my own name. My thinking is to put that $3.3K back into the PLUS loans, but my parents think for some reason that it might be better to use the money to pay the interest instead, so we can claim it in taxes. We're an immigrant family, and are still learning to navigate our way through... Pay back loans or interest?
Source: Student Doctor Network - Category: Universities & Medical Training Authors: Tags: Financial Aid Source Type: forums