November 19, 2010

5 Facts About Your Student Loan Grace Period

A grace period is the amount of time you have before your first student loan payment is due. 

If you graduated from college last spring, the grace period on your Stafford loans may be ending this month.

Here are 5 facts you should know about your grace period.

1. Your grace period begins automatically…

Your grace period starts as soon as you stop carrying at least half of a full course load. Definitions of half-time enrollment vary by school. It’s important to know how your school defines this—especially if your schedule changes.

2. …And so do your payments.

Once your loan’s grace period ends, it will automatically enter repayment. That means your first Stafford loan payment may be due if you graduated last spring.

When repayment begins, you will be automatically enrolled in standard repayment. If your standard payments are too high, you can choose a repayment plan that better fits your needs.

3. You can use your grace period more than once.

Each eligible federal student loan receives a single grace period. However, you retain your full grace period if you return to full-time student status before your grace period ends.

For example, after using 4 months of a 6-month grace period, you return to at least half-time status. The next time you drop below half-time enrollment, you would still receive that full 6-month period.

4. Your grace period’s length varies.   

Your grace period’s length depends on the type of student loan you have:

  • Stafford loans have a 6-month grace period.
  • Perkins loans have a 9-month grace period.
  • Grad PLUS loans disbursed on or after July 1, 2008, have a 6-month grace period.
  • Grad PLUS loans disbursed before July 1, 2008, do not have a grace period.
  • Borrowers of Parent PLUS loans first disbursed on or after July 1, 2008, can request a 6-month grace period.
  • Borrowers of Parent PLUS loans first disbursed before July 1, 2008, do not receive a grace period.
  • Grace periods vary for private loans—you can contact your lender to find out about your grace period.

If you consolidate your loans, you may lose your grace period on loans that were not in repayment before you consolidated them.

5. You are responsible for knowing your grace period’s details.

Use the National Student Loan Data System (NSLDS) to stay on top of your payments and keep tabs on your federal student loans online.

Remember, you are responsible for making your payments on timeeven if you have not received a bill or payment notice. Contact your servicer (the company that sends your student loan bills) or lender to find out when your first payment is due, how much you owe, and where to send your payments.

Also, begin repaying before your grace period ends if you can. You are not required to take advantage of your grace period.