For most student loans, both federal and private, the grace period is six months, but some loans may have 9-month grace periods like a Federal Perkins Loans or certain private student loans. To determine the length of your grace period you want to make sure you read your loan’s term and conditions.
Your grace period is a great time to start putting together a student loan repayment plan that works for you. Your repayment options, and when repayment begins will vary depending on the types of student loans you have.
What is a Grace Period for Student Loans?
The grace period on your student loans starts once you graduate or drop below half-time enrollment. During your grace period you are not required to make monthly payments, although your student loan interest will continue to accrue on your federal unsubsidized and private student loans. Your student loan grace period gives you time to prepare to pay back your student loans. You should use this time to get yourself settled and find a job.
Federal Student Loan Grace Period
Most federal student loans have a six-month grace period, but this depends on the type of loan you have. Direct Subsidized Loans and Direct Unsubsidized Loans each have a six-month grade period, whereas Direct PLUS Loans do not have “grace periods.” However, Direct PLUS Loans are eligible for deferment, which can suspend your obligation to repay the loan for a six months or longer. A six-month deferment is automatic for graduate and professional students with a Direct Grad PLUS Loan. On the other hand, parents who took out a Direct Parent PLUS Loan for their child’s education MUST request deferment. If you have a Federal Perkins Loan, your grace period is nine-months.
| Type of Federal Student Loan | Length of Grace Period |
|---|---|
| Direct Subsidized Loan | 6 months |
| Direct Unsubsidized Loan | 6 months |
| Direct Grad PLUS Loan | 6 months (automatic deferment) |
| Direct Parent PLUS Loan | 6 months (deferment optional, if requested by parent) |
| Perkins Loan | 9 months |
When Does the Grace Period Start for Student Loans?
In general, the grace period for student loans begins after you graduate or once you drop below half-time enrollment at your school. Every school has its own policy for what it means to be enrolled half-time, and we recommend that you familiarize yourself with your school's policy so you do not unintentionally trigger your grace period. If you are considering withdrawing or dropping some classes, have a talk with your financial aid office to understand the impact of your decision. Along with entering your grace period, your school could be required to refund some of your financial aid back to the U.S. Department of Education.
How Long is the Grace Period for Student Loans?
The grace period for most federal student loans is six months. One exception is the Federal Perkins Loan, which has a grace period of nine months. Most private student loans offer a six-month grace period, but the length of your grace period will vary by lender. Some lenders may offer a longer grace period (like nine months), whereas others may offer no grace period at all, requiring you to begin repayment as soon as your loan is disbursed.
What happens if you don’t use your entire grace period before you go back to school?
If you happen to enter your grace period, do know that returning to school and enrolling at least half-time before your grace period ends would postpone your grace period. If you enroll back in school at least half-time, the next time you drop below half-time enrollment, your partially used grace period on federal student loans will reset. This may also be true for certain private student loans, but you need to read your terms and conditions to understand how your grace period works.
What happens if you use your entire grace period and then go back to school?
When you decide to go back to school and enroll at least half-time, your federal student loans will be placed in an in-school deferment. When you drop below half-time enrollment, your loans with the already used grace period will immediately enter a repayment status or a post-enrollment deferment for up to six-months. If you can, it’s recommended that you don’t use the deferment and start making payments.
If you have private student loans, some loans offer you the ability to enter a deferment while you’re enrolled in-school at least half-time, and some may even offer a post-enrollment deferment. But you will need to check your loan’s terms and conditions or call your loan servicer and ask about your options.
Paying Student Loans During Grace Period
Just because you don’t have to pay on your student loans during your grace period, doesn’t mean you can’t. Any unsubsidized loans will continue to accrue interest during your grace period—the interest on your federal subsidized loans will continue to have the government pay your interest throughout your grace period. Your grace period is a great time to pay down some, if not all, of the student loan interest that may have accrued while you were enrolled in school. Paying student loans during your grace period can help you cut down on any outstanding interest being capitalized, or added to your principal balance once your loan enters repayments.
Making a payment during your grace period doesn’t end your grace period, so you can explore this option if you think it could help you plan for repayment. On top of helping you discover what it feels like to make your monthly payment, paying before you have to helps you pay back your loan faster and save in interest paid over the life of the loan.
Student Loan Grace Period FAQs
Do Student Loans Have a Grace Period?
For the most part, student loans do have a grace period. Federal student loans typically have a six-month grace period, but the grace period is nine months for those who borrow the Federal Perkins Loan.
Private student loans are offered by private lenders, so the length of the grace period varies by lender. The grace period will be six months in most cases with private lenders, but some offer nine-month grace periods to borrowers, and some have no grace period at all.
Do Student Loans Accrue Interest During Grace Period?
All student loans, except for Federal Direct Subsidized Loans and Federal Perkins Loans, accrue interest during the grace period. The government pays the interest on a subsidized loan (1) when you’re enrolled in school at least half-time, (2) during an authorized deferment, and (3) during the grace period. For other student loans, you are responsible for paying all of the interest. If you have any loans other than a subsidized one and can afford to make interest payments during your grace period, you could lower the amount of interest that would be capitalized once you finally enter repayment.
Can I Extend My Student Loan Grace Period?
You can’t technically extend your grace period. However, if you do not use your entire grace period time and go back to school, the next time you drop below half-time enrollment, your grace period resets on those federal loans and you will have a full six-months (or nine-months if you have a Federal Perkins Loan). Check to see if this is an option on your private student loans, not all lenders will offer this benefit.
If you are unable to make payments on your student loans, you may want to look into some other ways to postpone or decrease your monthly payment in the short-term.
Student loan forbearance or deferment can temporarily pause your loan payments or reduce your monthly payment amount. Forbearances are offered to borrowers of federal student loans and private student loans, but eligibility requirements and conditions vary. Deferment is available solely for federal student and parent education loans. Under an authorized deferment on federal student loans, interest will be covered by the government on subsidized loan funds.
Private student loan lenders may have unique measures in place that mimic federal student loan deferment or forbearance options to help borrowers grapple with unforeseen economic hardship.
Best Student Loan Refinancing Options
As your grace period comes to an end, you may want to consider student loan refinancing. By refinancing your student loans, you could obtain a lower interest rate, extend your repayment term, and lower your monthly payment. Additionally, many students underestimate what their monthly payment will be after they graduate and having multiple loans can make it more difficult to stay organized. Refinancing your student loans could simplify repayment for you by combining your loans into one single payment. We work with some of the best student loan refinance lenders in the industry to help you get on the right track to repayment.
Best Student Loan Refinance Lenders
SoFi Student Loans
- Rates as low as 1.74% variable and 3.49% fixed1
- No fees or prepayment penalties
- Unemployment protection
1Fixed rates range from 3.49% APR to 7.99% APR with a 0.25% autopay discount. Variable rates from 1.74% APR to 7.99% APR with a 0.25% autopay discount. Unless required to be lower to comply with applicable law, Variable Interest rates on 5-, 7-, and 10-year terms are capped at 8.95% APR; 15- and 20-year terms are capped at 9.95% APR. Your actual rate will be within the range of rates listed above and will depend on the term you select, evaluation of your creditworthiness, income, presence of a co-signer and a variety of other factors. Lowest rates reserved for the most creditworthy borrowers. For the SoFi variable-rate product, the variable interest rate for a given month is derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR index increases. The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. This benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. The benefit lowers your interest rate but does not change the amount of your monthly payment. This benefit is suspended during periods of deferment and forbearance. Autopay is not required to receive a loan from SoFi.
College Ave Student Loans
- Variable rate range: 3.44% – 6.64% APR1
- Fixed rate range: 3.49% – 6.74% APR1
- No application or prepayment fees
- Apply in 3 minutes or less for instant credit decision
College Ave Student Loans products are made available through Firstrust Bank, member FDIC, First Citizens Community Bank, member FDIC, or M.Y. Safra Bank, FSB, member FDIC.. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
1The 0.25% auto-pay interest rate reduction applies as long as the borrower or cosigner, if applicable, enrolls in auto-pay and authorizes our loan servicer to automatically deduct your monthly payments from a valid bank account via Automated Clearing House (“ACH”). The rate reduction applies for as long as the monthly payment amount is successfully deducted from the designated bank account and is suspended during periods of forbearance and certain deferments. Variable rates may increase after consummation.
2This informational repayment example uses typical loan terms for a refi borrower who selects the Full Principal & Interest Repayment Option with a 10-year repayment term, has a $40,000 loan and a 5.5% Annual Percentage Rate (“APR”): 120 monthly payments of $434.11 while in the repayment period, for a total amount of payments of $52,092.61. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.
3$5,000 is the minimum requirement to refinance. The maximum loan amount is $250,000 for those with medical, dental, pharmacy or veterinary doctorate degrees, and $150,000 for all other undergraduate or graduate degrees.
Information advertised valid as of 4/12/2022. Variable interest rates may increase after consummation. Approved interest rate will depend on the creditworthiness of the applicant(s), lowest advertised rates only available to the most creditworthy applicants and require selection of full principal and interest payments with the shortest available loan term.
Splash Financial Refinance Loan
- Rates as low as 1.74%1 Variable APR and 1.99%1 Fixed APR
- No pre-payment penalties, origination, or application fees
- See rates in 3 minutes without affecting your credit score2
1The rates displayed may include a 0.25% autopay discount.
2To check the rates and terms you qualify for, Splash Financial conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, the lender will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
Earnest Student Loan Refinancing
- Variable rates starting at 1.74% APR (including 0.25% Auto Pay discount)*
- Fixed rates starting at 2.74% APR (including 0.25% Auto Pay discount)*
- Choose your own monthly payment
- No fees of any kind and exceptional customer service for the life of your loan
- Check your rate in under 2 minutes
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Actual rate and available repayment terms will vary based on your income. Fixed rates range from 2.99% APR to 8.24% APR (excludes 0.25% Auto Pay discount). Variable rates range from 1.99% APR to 8.24% APR (excludes 0.25% Auto Pay discount). Earnest variable interest rate student loan refinance loans are based on a publicly available index, the 30-day Average Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. The variable rate is based on the rate published on the 25th day, or the next business day, of the preceding calendar month, rounded to the nearest hundredth of a percent. The rate will not increase more than once per month. The maximum rate for your loan is 8.95% if your loan term is 10 years or less. For loan terms of more than 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95%. Please note, we are not able to offer variable rate loans in AK, IL, MN, NH, OH, TN, and TX.
*Auto Pay Discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance. Not all borrowers will qualify for our lowest rates, and your rate will be based on creditworthiness at time of application.
The information provided on this page is updated as of 4/29/2022. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice.
Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 303 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, e-mail us at [email protected], or call 888-601-2801 for more information on our student loan refinance product.
You Put in the Work. Now Reap the Rewards.
- Variable Rates between 1.87% - 6.52% APR1
- Fixed Rates between 2.30% - 5.96% APR1
- No application or prepayment fees
- Cosigner release with 24 consecutive on-time payments2
1Interest Rates
Fixed interest rates range from 2.30% APR (with auto debit discount) to 5.96% APR (without auto debit discount). Your interest rate will depend on your (and if applicable, your cosigner’s) credit qualifications. The fixed interest rate will remain the same for the life of the loan.
Variable interest rates range from 1.87% APR (with auto debit discount) to 6.52% APR (without auto debit discount). Your interest rate will depend on your (and if applicable, your cosigner’s) credit qualifications. Variable rates may increase after consummation. Variable rates for Nelnet Bank Refinance Loans are calculated as the One-Month SOFR plus the applicable Margin percentage. Variable rates will be based on the highest One-Month SOFR as published by the Federal Reserve Bank of New York and/or the Wall Street Journal “Money Rates” table on the twenty-fifth day (or the next business day) of the immediately preceding calendar month. The variable rate may change on the first day of each month if the SOFR index changes. This may result in higher monthly payments. The current One-Month SOFR index is 0.05% as of January 1, 2022.
Auto Debit Interest rate reduction of .25% for automatically withdrawn payments from any designated bank account (“auto debit discount”). Auto debit discount applies when full payments (including both principal and interest) are automatically drafted from a bank account. The auto debit discount will continue to apply during periods of approved forbearance or deferment if the auto debit discount was in effect at the time of receiving the forbearance or deferment. Auto debit discount will remain on the account unless (1) the automatic deduction of payments is canceled or (2) there are three consecutive automatic deductions returned for insufficient funds at any time during the term of the loan.
The lowest rate for each loan type requires automatically withdrawn (“auto debit”) payment. The lowest rate is available only to the most creditworthy applicants. Not all borrowers will receive the lowest rate. The interest rate and Annual Percentage Rate (APR) may be higher depending upon (1) the credit history of the borrower and, if applicable, the cosigner, (2) the repayment option and loan term selected, (3) the loan type selected, and (4) the highest level of education attained. If approved, applicants will be notified of the rate qualified for within the stated range.
2Cosigner Release. A request for the cosigner to be released can be made by either the borrower or cosigner when each of the following conditions has been met:
- The account must have been in full principal and interest repayment for at least 24 months.
- Twenty-four consecutive, on-time principal and interest payments, or lump sum equivalent, must have been made. NOTE: A lump sum payment does not replace the requirement to have been in full principal and interest repayment for at least 24 months. Interest-only or fixed-pay payments while enrolled in school do not qualify towards the 24 consecutive on-time payments.
- The loan must be current at the time of request.
- The loan must not have been in deferment, hardship forbearance, or other alternative payment assistance plan within the past 24 months.
- The loan must not have been permanently modified from its original terms in the credit agreement.
- The primary borrower must be a U.S. citizen or have permanent residency in the United States.
- The primary borrower must meet the age of majority requirement in their permanent state of residency.
Requirements are subject to change. If all of these conditions have been met, then an application for cosigner release may be submitted. The primary borrower is required to demonstrate they have the ability to assume sole responsibility for the loan(s) by providing proof of income, meeting debt-to-income requirements, and having a satisfactory credit history. (A credit report will be obtained during the review process).
3Refinance Loan Eligibility: You must be a U.S. citizen or permanent resident alien with a valid U.S. Social Security number, and be the legal age to enter into binding contracts in your state/territory of residency, or be at least 17 years of age and apply with a cosigner who is at least the age of majority in their state/territory. Non-residents can apply with an eligible cosigner who is a U.S. citizen or permanent resident alien with a valid U.S. Social Security number. The student loans you refinance must be in their grace or repayment period, and you can no longer be enrolled in school on a half-time or more basis. You must have at least $5,000 in student loans to refinance. You, or your eligible cosigner, must have an annual income of at least $36,000. Approval subject to credit review. Other credit criteria may apply.
Refinance Loan Limits:
Minimum loan amount: $5,000
Maximum student loan limits:
$125,000 for borrowers with an undergraduate degree.
$175,000 for borrowers with a graduate, MBA, or law degree.
$500,000 for borrowers with a graduate health professional degree.
Nelnet Bank, and any associated logos or design marks, are trademarks or service marks of Nelnet, Inc. All loan programs and terms are subject to change or may be discontinued at any time without notice. Certain restrictions and limitations may apply.
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