When Do You Start Paying Student Loans?

When borrowers take out a student loan, repayment does not begin right away in most cases. If you’re still attending school or recently graduated, you may be wondering when you start paying student loans back. Payments on student loans can be delayed by a grace period or deferment for parent PLUS loans. Continue reading to learn more about when to start paying student loans!

Don’t miss: Scholarships360’s free scholarship search tool

Grace period

Many student loans have a grace period. It begins when you graduate, drop below half-time enrollment, or leave school. The grace period is a time for the borrower to find employment and establish their finances before having to make monthly payments.

The length and conditions of the grace period depends on the lender and the type of loan.

See also: What is a student loan grace period?

Federal student loans

All Direct loans, subsidized or unsubsidized, have a grace period of 6 months. Direct unsubsidized loans accrue interest during the grace period. Subsidized Direct loans don’t accrue interest during the grace period. They begin accruing interest when repayment starts.

Federal parent PLUS loans do not have a grace period. Payment on parent PLUS loans begins when the loan is disbursed. However, parent PLUS loan borrowers can request that monthly payments be deferred while the student for whom the loans were borrowed is still in school. A request form must be completed to receive this grace period.

PLUS loans for graduate or professional students receive an automatic 6-month grace period when the student leaves school.

Also see: Grants to help pay off student loans

Private student loans

Many private lenders, such as Sallie Mae, have a grace period. However, not all lenders have a grace period. And, if they do, the length can differ from lender to lender. Typically, the grace period for private loans is 6 months. Remember, private loans accrue interest during the grace period.

Loan consolidation = End of grace period

It’s also important to note that if you choose to consolidate or refinance your loans, you will forfeit the grace period because repayment begins when the loan is paid by the lender. However, you can instruct your servicer to not disburse the loan until closer to the end of your grace period.

Be sure to read all the information about the grace period before you take out a student loan and before you consolidate loans.

Also see: Consolidation vs refinancing

How to prepare for student loan payments

Even if you don’t have to pay immediately, the grace period is not a vacation from your student loans. Borrowers should use the time to prepare for payments. Confirm that your contact information is up-to-date with your loan servicer, research repayment plans, and create a budget. 

Also see: 15 companies that help employees pay off student loans

Do your research and pay attention to dates!

Be sure you’re aware of when your grace period ends, and when you must begin making student loan payments. This will get you started off on the right foot and on track to be debt free!

Also see: How to consolidate and refinance student loans