Many student loans, whether federal or private, offer a six-month grace period before payments are due. Some, such as Federal Perkins Loans or specific private loans, may even provide nine months. To be certain, it's a good idea to review the terms and conditions of your loan.
Your grace period is an excellent opportunity to plan how you'll approach repaying your student loans. The repayment options available to you, as well as the timing for when payments begin, will depend on the types of loans you’ve taken out.
What is a Grace Period for Student Loans?
Once you graduate or drop below half-time enrollment, the grace period on your student loans begins. During this period, you are not obligated to make monthly payments, but the interest on your federal unsubsidized and private student loans will continue to accumulate. The grace period provides you with an opportunity to prepare for repaying your student loans, allowing you 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.
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