What Is My Student Loan Grace Period?

You recently graduated or left school, and you know you’ll have to start repaying your student loans at some point — but when? Understanding your student loan grace period is the crucial first step in planning to pay back your debt.

Thanks to the grace period, you have some time before you have to start making payments. Here’s how long that grace period lasts and how to make the most of this payment-free window.

What is a student loan grace period?

A student loan grace period is a period of time after you graduate, leave school, or drop below half-time enrollment where you don’t have to make payments on your student loans.

This hiatus provides new graduates and people transitioning out of school with a buffer to land a job and adjust to their new financial circumstances before tackling loan repayment.

How long is my grace period? 

Your student loan grace period can vary depending on whether you have federal student loans, private student loans, or a combination of both.

Federal student loan grace period

The grace period is six months for most federal student loans, including Direct Subsidized and Direct Unsubsidized Loans. Your student loan servicer automatically applies this grace period, so there’s no need to request it.

For Federal Perkins Loans, the grace period is nine months.

PLUS loans for parents do not have an automatic grace period, but parents who took out a PLUS loan to pay for their child’s education can request a six-month deferment after the student graduates, leaves school, or drops below half-time enrollment. Graduate and professional students who take out PLUS loans get an automatic six-month deferment.

Private student loan grace period 

Unlike federal student loans, private student loans don’t have a standard grace period — though six months is common with many lenders. However, some may require you to make payments while you’re in school, others could require you to start repayments as soon as you leave school, and some lenders offer a grace period that may be shorter or longer than six months.

Refer to your original loan documents or contact your loan servicer to see whether you have a grace period on your private student loans and how long that period is.

Special rules for federal loan payments in 2023-24

In October 2023, many federal student loan borrowers started making payments for the first time in three years after the federal government suspended payments during the COVID-19 pandemic. To ease this transition, the federal government created an “on-ramp” to help struggling borrowers.

The temporary on-ramp period lasts through September 30, 2024. During this time, you’re still required to make your student loan payments. However, if you miss your payments, the Department of Education will not report you as delinquent and your loans won’t enter default.

While borrowers may be temporarily shielded from the worst consequences, interest will accrue during the on-ramp period, so if you can afford to do so, make your payments as normal. 

Consequences of missing the end of your grace period

Missing the end of your student loan grace period can lead to a cascade of negative consequences.

First, missing a payment deadline can result in late fees or penalties, which add to your cost of borrowing. Over time, these fees can accumulate, making it even harder to get caught up and pay down your loan balance.

Second, missing or late payments can impact your credit score. Your payment history is a significant component of your credit score. Your loan servicer reports missing or late payments to the credit bureaus, resulting in a lower credit score. This can impact your ability to get approved for credit in the future.

Finally, continuing to miss student loan payments can lead to student loan default. When you default on your student loans:

• The entire balance and any accumulated interest becomes immediately due
• You lose eligibility for other federal student loan benefits, such as deferment, forbearance, and income-driven repayment plans
• You no longer qualify for additional federal student aid
• Your tax refunds may be seized and applied to your defaulted loan
• Your wages may be garnished

5 ways to make the most out of your grace period

Your student loan grace period can also be an opportunity to set yourself up for financial success. Here are a few tips to help you maximize this time and position yourself for a smoother repayment process:

1. Plan your repayment strategy. Use the grace period to gain an understanding of your loan details, including interest rates, balance, and expected monthly payments. Create a budget that includes your loan repayment and other needs and wants.
2. Apply for an income-driven repayment plan. If your federal loan payments are too high, consider an income driven-repayment plan, which adjusts your payment amount based on your income and family size. This can make your payments more manageable once the grace period ends.
3. Start making payments early. If you’re financially able, consider making payments during the grace period. For most student loans, interest continues to accrue during your grace period and is added to your outstanding loan balance. Making payments during the grace period can reduce the total interest you’ll pay over the life of the loan.
4. Look for loan forgiveness programs. Research loan forgiveness programs you might qualify for, such as Public Service Loan Forgiveness (PSLF) or Teacher Loan Forgiveness. These programs can forgive your remaining balance after a certain number of qualifying payments. 
5. Consider loan consolidation or refinancing. Consolidating your federal student loans can simplify repayment by combining multiple loans into one loan with one monthly payment. If you have private student loans, refinancing could lead to lower interest rates and monthly payments.

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Grace period FAQ

Here are answers to a few commonly asked questions about student loan grace periods.

Can I extend my grace period?

Generally, you can’t extend the grace period on your student loans. But with federal student loans, you may be able to extend the grace period in certain cases. For example, if you’ve been called to active military duty for more than 30 days before the end of your grace period, or, if you left school and re-enroll at least half-time before your grace period ends, you can ask to extend the grace period. 

What happens if I return to school?

If you have federal loans and re-enroll in school at least half-time before the grace period ends, it resets. You’ll get another full grace period when you stop attending or drop below half-time enrollment again.

Private lenders may handle this situation differently; check with your lender to confirm its policy.

Can I make payments during my grace period?

Yes, you can make payments during your grace period. Making payments is encouraged to reduce the amount of interest that gets added to your loan balance.

How does interest accrue during the grace period?

For subsidized federal loans, the government covers the interest while you’re in school and during the grace period. For unsubsidized loans, interest continues to accrue during the grace period. If you don’t make interest payments, it can be added to your total loan balance once the grace period ends.

Learn more: How Your Student Debt Can Grow