Students with federal student loans are offered a grace period of six months after graduation or dropping below half-time enrollment before payments begin. Your first payment will be due at the end of this period.
What happens during the grace period
- Federal Direct Subsidized Loans: The government pays the interest that accrues during your grace period, once you begin repayment you are responsible for the interest charges.
- For Federal Direct Unsubsidized Loans and Direct PLUS Loans, interest starts building up as soon as the loan is given out. If you do not pay the interest before commencing repayment, it will be added to the principal amount when you start making payments, meaning you may have only borrowed $10,000 but could start repayment with a higher balance when the interest is added
