Janice Lozano
For most federal student loans, you will start making payments six months after you graduate, leave school, or drop below half-time enrollment. During this grace period, interest will continue to grow on your loans. If you have a Direct Loan, Grad PLUS Loan, or Stafford Loan, you will have a six-month grace period, while Perkins Loans have a nine-month grace period. Parent PLUS loans are different, as parents must start repaying as soon as the loan funds are received or choose to defer until their child graduates. Private student loan lenders should provide you with information on when and how to pay your loan.
| Characteristics | Values |
|---|---|
| When do you start paying for federal student loans? | You start paying off federal student loans six months after you graduate, leave school, or drop below half-time enrollment in school. |
| When do you start paying for private student loans? | Your lender or servicer should provide you with information on when and how to pay your loan. |
| What is a grace period? | A grace period is a time after you graduate, leave school, or drop below half-time enrollment when you don't have to make payments. Interest will continue to grow during this period. |
| What is the grace period for Direct Loans, Grad PLUS Loans, and Stafford Loans? | The grace period for these loans is six months. |
| What is the grace period for Perkins Loans? | The grace period for Perkins Loans is nine months. (No new Perkins Loans have been issued since 2017.) |
| When do parents start paying off Parent PLUS Loans? | Parents must start repaying Parent PLUS Loans as soon as the child or school receives the loan funds. However, they can request to defer making payments while their child is in school and for an additional six months after their child graduates, leaves school, or drops below half-time enrollment. |
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What You'll Learn
Federal student loans
For federal student loans, you will generally start making payments six months after you graduate, leave school, or drop below half-time enrollment. This six-month period is known as the "grace period", during which interest will continue to grow on most loans. Direct Loans, Grad PLUS Loans, and Stafford Loans (Direct Subsidized and Direct Unsubsidized) all have this six-month grace period.
Perkins Loans, which are no longer issued, had a nine-month grace period. Federal direct loans taken out in your name are deferred if you are enrolled at least half-time. If you drop below half-time enrollment, you enter the grace period. Once this period ends, any unpaid interest accrued on unsubsidized loans will be capitalized, and repayment begins.
If you return to school for further studies, your loans can go back into in-school deferment. However, once the grace period is used up, it cannot be regained. Parent PLUS loans are different, as parents must start repaying as soon as the loan funds are received, although deferment is possible until the student graduates.
There are various options for federal student loan repayment plans, including the Public Service Loan Forgiveness program, Perkins Loan Cancellation and Discharge, and the Teacher Loan Forgiveness program. Student loan refinancing can also make repayments more manageable, although it does not allow for a pause in payments. Student loan forbearance and deferment are short-term solutions to reduce or pause payments, but interest typically continues to accrue, except for subsidized federal loans.
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Private student loans
It is important to understand the repayment process for your private student loan. For most federal student loans, you will start making payments six months after you graduate, leave school, or drop below half-time enrollment. Private student loans may have different grace periods or separation periods, so be sure to review your loan documents carefully. Your private student lender or servicer should reach out to you about your loan payments, usually in the form of an email or a billing statement mailed to you each month.
If you are unsure about the details of your private student loan, it is important to get organized and understand the terms of your loan. Know how many loans you have, their interest rates, and who your lenders are. Creating a simple spreadsheet can help you keep track of your loans and their respective details. Additionally, consider reaching out to your loan servicer for more information or checking your original loan paperwork, such as a promissory note or disbursement notice.
If you are facing special circumstances or financial difficulties, there may be options available to help you manage your private student loan. For example, some lenders offer a Graduated Repayment Period (GRP) that allows interest-only payments for a certain period. It is important to do your research and understand your rights and options when it comes to repaying your private student loans.
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Grace periods
A grace period is an allotted amount of time during which you are not expected to make payments on your student loans after initially leaving school or dropping below half-time status. Most federal loans have a grace period. The most common types of student loans that offer a grace period are the Federal Stafford Loan, Federal Direct Loan, and Federal Perkins Loan.
For Stafford and Direct Loans, the grace period is six months. If you go back to school during this period, you will be allotted another grace period. However, if you let this initial grace period elapse, you will not be eligible for a new grace period in the future.
Perkins Loans have a nine-month grace period. If you return to school during this period, you will be awarded another six-month grace period. Additionally, every time you qualify for deferment, you will always be granted a minimum six-month grace period following the end of the deferment.
To find out the length of the grace period on your loan, read your loan promissory note. If you have misplaced this, you can contact the holder of your loan promissory note (the lender) who will be able to provide you with this information.
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Parent PLUS loans
For most federal student loans, repayments start six months after graduation, leaving school, or dropping below half-time enrolment. However, Parent PLUS loans are different. These loans are taken out by parents on behalf of their dependent students to cover the costs of their education. They do not have a grace period, so parents must start repaying them as soon as the funds are disbursed to the school. Parents can choose to defer repayment until their child graduates, but interest will accrue during this time.
Parents considering a Parent PLUS loan should be aware that there are changes to the loan eligibility and borrowing limits that may affect their options. For example, starting on July 1, 2026, parents may only borrow a Parent PLUS loan if their dependent student has already taken out their maximum annual unsubsidized loan amount. There are also new annual and aggregate loan limits: an annual limit of $20,000 per child and a lifetime limit of $65,000 per student.
To apply for a Parent PLUS loan, parents need to fill out the Free Application for Federal Student Aid (FAFSA), where they will first see the option for this loan. They will need to provide information about their finances and credit history, as a credit check is performed as part of the application process. If approved, the government will send the loan information to the school to confirm the loan amount. It is important to note that parents are not required to borrow the full loan amount offered, and they can choose to borrow only what is necessary to cover the costs of their child's education.
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Consolidating federal student loans
For federal student loans, you usually start making payments six months after graduating, leaving school, or dropping below half-time enrolment. However, there are a few things to consider when it comes to consolidating these loans. Consolidating your federal student loans can have several benefits, but it's important to carefully review the terms and conditions before making any decisions. Here are some key points to consider:
Interest Rates
The interest rate on a consolidated loan, such as a Direct Consolidation Loan, is calculated differently from your existing federal loans. The new interest rate is a weighted average based on your loan amounts and interest rates. This means that the interest rate reductions you may have received on certain federal loans, such as the Federal Family Education Loan (FFEL) Program Loans, may no longer apply after consolidating. The interest rate on the consolidated loan is fixed for the life of the loan.
Monthly Payments
Consolidating your federal student loans may result in lower monthly payments. This is because consolidation combines all your loans into one, and any unpaid interest is capitalised, meaning it is added to your principal balance. As a result, you will pay interest on the new, higher principal balance. It's important to review the repayment plan carefully, as consolidating your loans can sometimes cost you more over the life of the loan.
Grace Period
Most federal student loans have a grace period, which is the time after you graduate, leave school, or drop below half-time enrolment when you don't have to make payments. This grace period is typically six months, during which interest will continue to grow on your loans. Towards the end of your grace period, you will need to decide whether to consolidate your federal student loans, choose a repayment plan, and consider enrolling in autopay.
Loan Servicer
Before consolidating your federal student loans, it's important to contact your loan servicer for free help and information. You should never have to pay for assistance with your federal student loans, so be cautious of any potential student loan scams. Your loan servicer can provide you with specific details about your loans and help you understand the implications of consolidating them.
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Frequently asked questions
For most federal loans, you will start making payments six months after you graduate, leave school, or drop below half-time enrollment.
Your lender or servicer should provide you with information on when and how to pay your loan. You should receive this information in the form of an email or a billing statement mailed to you each month.
Parent PLUS loans accrue interest from their disbursement date. Parents can choose to start repayment immediately or defer until their child graduates.
Yes, Perkins loans have a nine-month grace period. However, no new Perkins loans have been issued since 2017.
