What is the student loan grace period? A grace period is the period of time someone is late with the payment and dues not attract any penalties. There are many different scenarios of grace periods. The most important thing about it is that the students are aware of the fact that as long as they make the payment within or during the grace period, then they will not be treated in a different way from those who make the repayments in due time.
Funding of college education takes a well balanced grants program, personal savings, scholarships and even student loans. The cost of tuition is high and that is why it is increasingly difficult for any student to pay it alone particularly if they are having bad credit history. Even after tallying all your scholarships and grants, chances of you finding that adequate are slim and that is why there is need for student loans to help bridge the financial gap still in existent.
The good thing is that there are federal student loans and student loans which are very flexible as well as offer great flexibility than any other kind of loan. With college education requiring tuition money to stay in, you will need flexible loans to continue with your education which can last even 4 or more years. Loan providers give grace periods allowing students to postpone their loan repayment obligation until they have graduated.
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This kind of loan deferment plan or grace periods enable students to concentrate on their studies and graduation and also find employment before they commence their student loans repayment.
Benefits of federal student loans
As much as they are the best higher education financiers, they also are the best option due to the kind of grace periods that they offer. Irrespective of whether the student is in the unsubsidized or subsidized loans categories they will get grace periods which they do not have to many any payments against the student loans. The deferments of grace periods are in place to allow students to postpone any repayments on the federal guaranteed loan for 6 months after graduation.
However, there is an exception to the grace periods and this is the federal direct plus loan for parents (FDPLP). Those parents whop get this loan are supposed to start the repayment immediately after the disbursement of the loan.
Students who are benefiting from federal loans should know whether they have unsubsidized or subsidized loans because they affect the total amount owed after graduation. Subsidized loans accrues interest even while in school and is paid by the federal government. This means that when you commence the repayment you will only be paying the original principle.
Students who have unsubsidized loans must also know what will be expected of them when they start their repayment schedule. For instance, even with the grace periods on the federal loan, it is important you know that the loan continues to accrue interest even as you continue studying. This therefore means that upon graduation, you will be making payment against your student loan and will be responsible for all the interest which have accrued in addition to the original principle.
In the grace period you will get repayment instructions which bear the monthly payment schedule reminding you when the first payment is due. All the information pertaining to repayment obligations, loan deferments and allowable grace are on the promissory note you signed when accepting the loan.