Grace Period for Student Loans

"Grace Period for Student Loans" submitted by SchoolGrantsfor Editorial Team and last updated on Monday 9th January 2012

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The grace period is a short time period after graduation during which you are not required to begin repaying your student loans. The grace period may also kick in if you leave school for a reason other than graduation or drop below half-time enrollment. You will receive a grace period before your repayment period begins on a Stafford or Perkins Loan. Depending on the type of loan, you will have a grace period of six months (Stafford Loans) or nine months (Perkins Loans) before you must start making payments on your student loans. PLUS Loans do not have a grace period. During the grace period, no interest is added to your loan. If you are called to active military duty for more than 30 days, the grace period will be delayed.

Grace Period For PLUS loan and Parent PLUS loan

Repayment of a PLUS loan begins on the date of the last disbursement. There is no grace period. However, graduate and professional student PLUS borrowers may defer repayment while they are enrolled in school at least half-time and, for PLUS loans first disbursed on or after July 1, 2008, for an additional six months after they cease to be enrolled at least half-time. Parent PLUS loan borrowers may request a deferment of repayment on PLUS loans first disbursed on or after July 1, 2008, while the student on whose behalf the loan was obtained is enrolled at least half-time and for an additional six months after the student ceases to be enrolled at least half-time. Interest that accrues on a PLUS loan during a period of deferment may be paid by the borrower or capitalized* when the deferment period ends.

Grace Period For Direct or FFEL Subsidized AND Unsubsidized Stafford Loan

Interest is paid by the Department for students in the subsidized Stafford program as long as they remain enrolled at least half time and through a post-graduation grace period, but is charged to those borrowing in the unsubsidized Stafford program.

Subsidized Stafford Loan

The federal government pays the interest for a subsidized Stafford Loan while you’re in college and during the six months grace period after you graduate, leave school or enroll (your grace period) less than half time and during a deferment (a postponement of loan payments) you’ll make no loan payments until your grace period ends.

Unsubsidized Stafford Loans

Unsubsidized Stafford Loans do not require a student to have financial need. The borrower is responsible for paying all interest on unsubsidized Stafford Loans. Remember, you can either pay the interest as you go along or it will be capitalized (i.e., added to the principal loan balance) later.

Federal Perkins Loans

The grace period is nine months. However, if you’re attending less than half-time, check with your financial aid office to determine your grace period. During the grace period, you don’t have to pay any principal,* and you won’t be charged interest.

Loan consolidation During your grace period

For both FFEL and Direct Loans you can consolidate:

You’ll get more information about repayment choices before you leave school (exit counseling), and later, during your grace period, from your loan holder.

Credit Card Grace Period

If you have a credit card, the 25-day interest-free period between the time of a purchase and the payment due date shown on your next statement. Be sure to read the terms and conditions; some credit card issuers give a grace period only if the account is paid in full and doesn’t have a balance carried over from the previous month. Cash advances and balance transfers generally do not have a grace period.

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