Douglas Olsen
The time at which loan repayment begins depends on the type of loan. For federal student loans, repayment usually begins six months after graduation, leaving school, or dropping below half-time enrollment. Federal loans may also have a grace period during which interest continues to grow. Private student loan repayment information, including grace periods, should be provided by the lender or servicer. The U.S. Department of Education's Federal Student Aid website provides information on federal student loan balances and repayment. Additionally, the Student Loans Company (SLC) will notify borrowers of overpayment. Repayment thresholds vary and are subject to annual changes.
| Characteristics | Values |
|---|---|
| When to start paying federal student loans | 6 months after graduating, leaving school, or dropping below half-time enrollment |
| When to start paying private student loans | Depends on the lender or servicer |
| Grace period for federal loans | Yes, usually 6 months; Perkins loans have a 9-month grace period |
| Grace period for Parent PLUS loans | No, but parents can request deferment while the child is in school and for 6 months after |
| Who to pay | Loan servicer |
| How to identify loan servicer | Check original loan paperwork, credit report, or contact school's financial aid office |
| Federal student loan repayment plans | Income-Based, Income-Contingent, PAYE, and Income-Driven |
| Repayment of UK student loans | When income goes over the threshold for the plan, including bonuses and overtime |
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What You'll Learn
Federal student loans
For federal student loans in the US, you will generally need to start making payments six months after you graduate, leave school, or drop below half-time enrollment. Most federal loans have a "grace period" during which you don't have to make payments during this transition period, although interest will continue to grow. Direct Loans, Grad PLUS Loans, and Stafford Loans (Direct Subsidized and Direct Unsubsidized) have a six-month grace period, while Perkins loans have a nine-month grace period (although no new Perkins loans have been issued since 2017). Parent PLUS loans don't have a grace period, so repayment must begin as soon as the loan funds are received, although deferment is possible while the child is in school and for six months after they graduate or leave school.
Towards the end of your grace period, you will need to decide whether to consolidate your federal student loans, determine your repayment plan, and consider enrolling in autopay. You can find out the details of your loan servicer and make payments through your StudentAid.Gov account. The U.S. Department of Education's Federal Student Aid website is the definitive source for information about your federal student loan balances, including whom to pay and when.
The Biden-Harris Administration had paused federal student loan collections since March 2020, but the U.S. Department of Education announced in May 2025 that it would resume collections on defaulted federal student loans. This initiative is intended to protect taxpayers from the cost of federal student loans. The Department of Education is committed to providing borrowers with clear information about their payment options and resources to assist them in selecting the best repayment plan.
As of August 2024, the Department of Education had not processed applications for enrollment in repayment plans such as Income-Based Repayment, Income-Contingent Repayment, or PAYE. However, they anticipate processing to begin the following month. The Treasury Offset Program, administered by the U.S. Department of Treasury, will also restart on May 5, 2025, with borrowers in default urged to contact the Default Resolution Group to make a monthly payment, enroll in an income-driven repayment plan, or sign up for loan rehabilitation.
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Private student loans
You should receive information from your private student loan servicer about your loan payments. This could be in the form of an email, a billing statement, or a "welcome kit". If you are unsure who your loan servicer is, you can check your original loan paperwork, such as a promissory note or disbursement notice, or contact your school's financial aid office for assistance.
It is recommended that you apply for a private student loan around two months before the tuition due date. Each school has its own tuition due date, so it is important to contact the financial aid office to find out the exact payment deadline. You can also use resources like Citizens to learn about tuition due dates and application deadlines for private student loans.
Once you are approved for a private student loan, the money is typically disbursed directly to the school. It is important to understand that for most federal and private student loans, you will need to reapply every year of college.
There are several ways to make your private student loan payments. Auto debit is a convenient option, where payments are automatically withdrawn from your bank account each month. Enrolling in auto debit may also offer a small interest rate reduction. You can also consider the Graduated Repayment Period (GRP), which allows you to make interest-only payments for a year after your loan enters principal and interest repayment, giving you time to transition from school to your career.
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Grace periods
A grace period is the waiting period between the time you leave school and the time you start making payments on your loans. Grace periods are typically six months, and you will get a notice from your loan servicer before the grace period ends with information about when your payments will be due. If you have unsubsidized loans, interest will accrue on your loans during the grace period, and you may want to consider making payments during this time if you can afford to, as it will help you avoid unnecessary interest capitalization.
For Federal Perkins Loans, there is a nine-month grace period. If you go back to school during the grace period and enroll in enough units to maintain at least half-time status in a qualifying course of study, you will be allotted another grace period. For Federal Perkins Loans, you will be granted a minimum six-month grace period following any deferment.
Stafford Loans and Direct Loans do not offer a new grace period following a deferment, and once your grace period expires, you will not be issued an additional grace period. However, if you go back to school during the initial grace period and meet the requirements for half-time status, you will be allotted another six-month grace period.
If you are in the military on active duty, the grace period can be extended for up to three years. Graduate PLUS and Parent PLUS loans are not eligible for a grace period, but you may be able to ask for a deferment for six months after you leave school or your child leaves school.
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Loan servicers
For federal student loans, you will start making payments six months after you graduate, leave school, or drop below half-time enrollment. Federal loans may have a grace period during which interest will continue to grow. Direct Loans, Grad PLUS Loans, and Stafford Loans (Direct Subsidized and Direct Unsubsidized) have a six-month grace period, while Perkins Loans have a nine-month grace period (although no new Perkins Loans have been issued since 2017). Parent PLUS Loans do not have a grace period, and parents must start repaying as soon as the loan funds are received, although they can request a deferment.
For private student loans, your loan servicer should provide you with information on when and how to pay. Your loan servicer should contact you about repayment. If you are unsure who your loan servicer is, you can check your original loan paperwork, such as a promissory note or disbursement notice. Alternatively, you can check your credit report for your lender's name or contact your school's financial aid office for assistance.
The U.S. Department of Education's Federal Student Aid website is the definitive source for information about your federal student loan balances, including whom to pay and when. The website provides resources and support to assist borrowers in selecting the best repayment plan. The Student Loans Company (SLC) will write to you if you have been overpaid.
In the United Kingdom, you will only repay your student loan when your income is over the threshold amount for your repayment plan. The threshold amounts change on 6 April every year. There is no penalty for paying off your loan early, and you can ask for a refund at the end of the tax year if your income was less than the yearly threshold.
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Repayment plans
The U.S. Department of Education has been making efforts to improve federal student loan repayment options. The Trump Administration aims to support borrowers in selecting a legal repayment plan that suits their needs and helps them achieve financial stability. The Department encourages borrowers to transition from the SAVE Plan to a legally compliant repayment plan, such as the Income-Based Repayment Plan.
The SAVE Plan, introduced by the Biden Administration, aimed to provide student loan relief, but it was deemed unlawful by federal courts. As a result, borrowers in the SAVE Plan need to switch to alternative repayment plans. The Department has started outreach to the affected borrowers, providing instructions on moving to legal repayment plans.
Borrowers in the SAVE Plan are urged to use the Loan Simulator to compare available repayment plans. This tool helps estimate monthly payments, determine repayment eligibility, and identify the most suitable option. By using the Loan Simulator, borrowers can make informed decisions about their repayment strategies.
The Department is also addressing the backlog of submitted IDR (Income-Driven Repayment) applications. Borrowers switching from the SAVE Plan to another IDR plan can expect timely processing of their applications. The Department has resumed collections and reminded borrowers of their legal obligation to repay their loans, emphasizing the benefits of regular progress toward repayment.
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Frequently asked questions
For most federal student loans, you will start making payments six months after you graduate, leave school, or drop below half-time enrollment in school. Federal loans may have a grace period, during which interest will continue to grow.
Your private loan servicer should contact you about repayment. You should receive information about when and how to pay your loan.
Check your original loan paperwork, such as a promissory note or disbursement notice. If you can’t find those papers, check your credit report for your lender’s name or contact your school’s financial aid office.
You’ll make a repayment if your income goes over the weekly or monthly threshold for your plan. For example, if you’re paid a bonus or overtime. The threshold amounts change on 6 April every year.
