What is a Student Loan Grace Period?

Carlos Paniagua Emiliano
Carlos Paniagua Emiliano

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Emma Östlund
Emma Östlund

Emma Östlund works as a business operations analyst at Sparrow. Emma studied Psychology, Computer Science, and Markets & Management at Duke University. With a well-rounded background in business and analytics, Emma strives to deliver data-driven conclusions and insights.

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Camden Ford
Camden Ford

Camden leads Sparrow’s business operations – everything from product management to business analytics. After graduating Cum Laude from Duke University where he studied Civil Engineering, Camden worked as a Consultant for A.T. Kearney where he worked in their Strategic Operations practice. With a strong background in analytics, Camden strives to deliver data-driven conclusions and insights.

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September 14, 2023

Before even starting college, you’ll imagine all the things that you can do with your degree. But then it hits you: student loans. The great news is that student loans include grace periods that give you time to plan before it’s time to pay.

In this article, we’ll dive into what a student loan grace period is, their length, and their flexibility.

What’s a “Grace Period”?

A grace period is a portion of time after graduating where you don’t have to make any payments on your student loans. Instead, you start paying once the grace period is over. 

How Long is a Student Loan Grace Period?

Typically, student loan grace periods last six months after graduating or leaving college. However, your grace period depends on whether you took out a federal loan or a private loan.

  • Federal Direct subsidized & unsubsidized loans: Six months
  • Federal Stafford subsidized & unsubsidized loans: Six months
  • Federal PLUS loans: NONE (but there is a six month deferment period)
  • Federal Perkins loans: Nine months
  • Private student loans: Varies by lender. Learn more about your private student loan.

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Can You Pay Student Loans During Your Grace Period?

Fortunately, you can begin to pay off your student loans during the grace period.

You can begin making monthly payments as if there isn’t a grace period. It might help you budget for your student loans adequately if you start paying sooner. If you have federal student loans, exit counseling will show you the amount owed before graduating. At the same time, if you’re unable to make a payment as you had planned during your grace period, you’re off the hook.

You can also pay off your loan’s interest if you’re not able to make full payments. Despite having a grace period, interest can still accrue toward your student loan. Before it’s added to your monthly balance, paying off that interest can ease the amount you’ll owe on a monthly basis. If this option is available to you, your lender will reach out to you.

Can You Extend a Grace Period on Student Loans?

If the six-month grace period isn’t enough, it is possible to extend it. However, the type of student loan you have determines the route you can take.

Federal Student Loans

A grace period can be extended if you are called to active military duty for more than 30 days before your grace period has ended. You’ll get another six-month grace period once you’re finished serving.

If you return to school at least half time before the grace period ends, you’ll have another six-month grace period.

What if you’re not planning on joining the military or going back to school? You could enroll in an income-driven repayment plan for $0 monthly payments. This option is worth considering if you’re struggling to find work after graduating. Check with your federal student loan servicer to see if you qualify. Another option could be to request deferment or forbearance on your loans. Depending on special circumstances, you could qualify for deferment or forbearance.

Private Student Loans

If you need an extension, lenders might extend your six-month period by three months. Deferment and forbearance might be an option to consider if your lender offers this. However it’s important to speak to your lender as soon as possible to see if they offer these options.

Final Thoughts

A grace period can ease the worry of having to pay back your student loans immediately. If you’re looking for a job or if you’re planning to move to another part of the country, take advantage of the time. You can also take this opportunity to get a head start on your student loan payments. Regardless of whatever you plan to do, it’s there to help you focus on the things that matter post-graduation.

If you’re looking for private loans that offer grace periods, Sparrow is a great place to start. With our one-time application, you can automatically find rates fit for you. At the same time, you can easily compare student loans side-by-side. This can help you determine if the grace period is right for you. Take control of your future with Sparrow!

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