Borrower Grace Periods
After you graduate, leave school, or drop below half-time enrollment, you have a period of time before you have to begin repayment. This “grace period” will be
- Six months for a Federal Stafford Loan (Direct Loan Program).
- Nine months for Federal Perkins Loans.
PLUS Borrowers—The repayment period for a Direct PLUS Loan begins at the time the PLUS loan is fully disbursed, and the first payment is due within 60 days after the final disbursement. However, a graduate student PLUS Loan borrower (as well as a parent PLUS borrower who is also a student) can defer repayment while the borrower is enrolled at least half-time, and, for PLUS loans first disbursed on or after July 1, 2008, for an additional six months after the borrower is no longer enrolled at least half-time. Interest that accrues during these periods will be capitalized if not paid by the borrower during the deferment.
Parent PLUS Loan borrowers whose loans were first disbursed on or after July 1, 2008, may choose to have repayment deferred while the student for whom the parent borrowed is enrolled at least half-time and for an additional six months after that student is no longer enrolled at least half-time. Interest that accrues during these periods will be capitalized if not paid by the parent during the deferment.
Make Your Payments on Time
Your loan servicer will provide information about repayment and will notify you of the date loan repayment begins. It is very important that you make your full loan payment on time either monthly (which is usually when you’ll pay) or according to your repayment schedule. If you don’t, you could end up in default, which has serious consequences. Student loans are real loans—just as real as car loans or mortgages. You have to pay back your student loans.
Get Your Loan Information
The U.S. Department of Education’s National Student Loan Data System SM (NSLDS SM ) provides information on your federal loans including loan types, disbursed amounts, outstanding principal and interest, and the total amount of all your loans. To access NSLDS, go to www.nslds.ed.gov.
If you’re not sure who your loan servicer is, you can look it up on www.nslds.ed.gov or call the Federal Student Aid Information Center at 1-800-4-FED-AID (1-800-433-3243; TTY 1-800-730-8913).
You have a choice of several repayment plans that are designed to meet the different needs of individual borrowers. The amount you pay and the length of time to repay your loans will vary depending on the repayment plan you choose. Go to Repayment Plans and Calculators for more information about the various repayment plans and to calculate your estimated repayment amount under each of the different plans.
If you have specific questions about repaying Direct, or Perkins Loans, contact your loan servicer. In the case of Perkins Loans, your servicer will be the school that made the loan. If you don’t know who your loan servicer is, go to www.nslds.ed.gov to find out.
You can consolidate (combine) multiple federal student loans with various repayment schedules into one loan.
Carefully consider whether loan consolidation is the best option for you. Loan consolidation can greatly simplify loan repayment by centralizing your loans to one bill and can lower monthly payments by giving you up to 30 years to repay your loans. You might also have access to alternative repayment plans you would not have had before, and you’ll be able to switch your variable interest rate loans to a fixed interest rate.
However, if you increase the length of your repayment period, you’ll also make more payments and pay more in interest. Compare your current monthly payments to what monthly payments would be if you consolidated your loans.
You also should consider the impact of losing any borrower benefits offered with the original loans. Borrower benefits from your original loan, which may include interest rate discounts, principal rebates, or some loan cancellation benefits, can significantly reduce the cost of repaying your loans. You might lose those benefits if you consolidate.
Benefits of a Consolidation Loan
- Make one monthly payment
- Your payments can be significantly lower
- You can take longer time to repay (up to 30 years)
- You can pay a lower interest rate than on one or more of your existing loans
- You can consolidate your loan during grace periods, once you entered repayment, or during periods of deferment or forbearance.
Interest rate for a Direct Consolidation Loan
The interest rate is a fixed rate for the life of the loan. The fixed rate is based on the weighted average of the interest rates on the loans you consolidate, rounded up to the nearest 1/8 of a percent. The interest rate cannot exceed 8.25%.
How to get a consolidation loan
Direct Consolidation Loan – You (or your parents for a Direct PLUS Consolidation Loan) can contact the Direct Loan Origination Center’s Consolidation Department at 1-800-557-7392 or you can go to www.loanconsolidation.ed.gov.