4 Things You Might Not Know About Your Student Loan Grace Period

If you are new to the confusing world of student loan repayment, then you might not know all the important facts. To help you get on the right track with your school debt repayment, check out the four things below that you might be surprised to learn about the grace period on your student loans. Learning these things just might save you some money down the road.

Fact #1 – Grace Period Begins….

Would it surprise you to learn that your enrollment status is related to when your grace period begins on your student loans? Any time your enrollment status drops to half-time, which can be when you graduate or when you reduce your class load or even are no longer enrolled in school, then your grace period starts.

It is important to note that half-time enrollment status varies by school, so you need to know how your school defines it. You do NOT want to be surprised when your grade period starts.

Fact #2 – It Signals The Start Of The Repayment Period

The start of your grace period on your school loans is like one of those prophecies of doom on sci-fi shows. Why? Because it means that your student loan repayment is about to start.

Once your grace period ends, then your student loan repayment starts immediately.  And when they start, you are enrolled in the standard repayment plan, which might not be so affordable. (luckily, you can change it!)

Fact #3 – The Grace Period Can Be Used More Than Once

Your grace period is like a never ending buffet. If you start school again, the grace period ends and it will not re-start until you fall below half-time status again.

The best part? Each time the grace period restarts, you get a clean slate. This means that you get the full grace period each time it restarts instead of it picking up back up where it left off.

*This is not true for private student loans though*

Fact #4 – The Grace Period Length Varies By Loan Type

Not all student loans get the same grace period. The most common is the 6-month period offered by Stafford loans.

Here’s the rundown of grace period lengths by student loan type:

  • 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.
  • Private loans—grace periods vary by lender.

Those are the four facts that you might not have know about student loan grace periods. And remember, if you want to start repaying the loan before the grace period ends, you can totally do that without penalty. Plus, it is a wise financial choice.

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