Counselor Corner: Understanding The Student Loan Grace Period

Share on FacebookShare on Twitter+1Pin it on PinterestSubmit to redditShare on TumblrShare via email
Den Chou Thumbnail

Den has worked at American Student Assistance for 5 years.

When trying to understand a confusing topic like student loans, it helps to talk it through with someone—so that’s what we did. Josie Corichi chatted with SALT’s expert counselors about little details that can make a big difference when repaying student loans. Today, we hear from Den about the student loan grace period.

A grace period is the amount of time, starting after you leave college or drop below half-time enrollment, before your first student loan payment is due. Its length varies by loan type, with the most common federal student loans (Stafford loans) having a 6-month grace period. Your loans may not be due right now, but that doesn’t mean you should wait to get on top of them!

The Most Important Thing To Know About Your Grace Period

You can still make payments during your grace period. And since the government pays the interest on your subsidized loans during this time, you would be chipping away directly at your principal balance—saving you a lot of money in the long run.

Read any horror stories about student loans tripling in balance because of interest? Don’t be that person! Also, know when your grace period ends and plan ahead. Do not get caught off guard. You paid large sums of money for your smartphone, use the calendar reminder!

Steps To Get On Track With Repayment

First, breathe. Then, keep track of the names of each player involved. Visit the National Student Loan Data System to see who services your various federal loans. You should also check your credit report for private student loans so that you have the full picture.

Grab a calculator and calculate your payments and your own personal budget. If your budget is good, consider paying more to save money on interest. If your budget is in the red, look for ways you might be able to decrease your costs. Also, remember that free help (like SALT™!) is out there.

Never assume the worst. Just spending a little of your time on your loans could save you a lot of trouble.

If You Can’t Make Your Payments

Don’t panic. Personal responsibility and budgeting are vital. Make sure you are not living frivolously. Do you really need unlimited minutes on your cell phone? The average difference between an unlimited minute and 1,000-minute plan is $360/year. Do you have premium cable? Basic cable is less than $20 a month, and you can get a lot of television shows online now.

If your personal budget isn’t frivolous and you still can’t make your payments, there are options available. A lot of students I’ve helped had no idea they could change their federal student loan repayment plans. Others did not know they could postpone payments with a deferment for a limited time while saving money on interest on subsidized loans.

So, check to see if another repayment plan works better for you. Or find out if you can qualify for a deferment before you accept the first forbearance (during which interest accrues on all loans) a servicer offers you.

Having a question for our counselors about the student loan grace period? Leave it in the comments.

You May Also Like:

Leave A Reply

Leave A Reply
  1. Sally March 25, 2013 / 10:50 pm

    Great post Josie! I took a deferment recently and am having trouble paying back the loans. But I just got a new job and hopefully that helps! Needed the education! $870 billion as of last year for the total amount of student loan debt in the US is amazing!!

  2. Josie March 26, 2013 / 9:20 am

    Yes, the total student loan debt in this country is staggering!

    Definitely check out the page that Ryan suggested. Federal student loan repayment options can really help make your student loans more manageable. Some of will even allow you to lower your monthly payment based on your income and family size–if you qualify, that is.

    Hope things work out for you!!

Leave A Reply

Your email address will not be published. Required fields are marked *

four + 6 =


You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>