If you're asking yourself “how long do I have after graduating to start paying back my student loan,” you’ve got the makings of a financially solid adult. Too often graduation comes faster than anyone expects, even though it seems like it can be forever when you’ve got midterms looming in front of you. Or, outside pressures make it necessary to drop below full-time student status or take a leave of absence from school altogether. Either way, the day will come when you have to repay your student loan.So how long will you get to celebrate your new degrees status before having to take a hit to your checkbook?
It depends. There are so many different types of loans, and all of them can vary on their grace periods before repayment commences. For simplicity’s sake, two general categories are discussed here. These only refer to loans taken out by you directly, not your parents.
Federal student loans that are made to students directly:
These could include the Perkins Loan, the Stafford Loan and/or the College Consolidation Loan. These loans can be subsidized or unsubsidized by the U.S. Government, depending on the level of need by the student and his or her family.
Both types are guaranteed by the United States Department of Education, and offer a grace period of six months. This means you will have six months after graduation to start making your payments.
That six-month grace period drops to three, if you become a less-than-full time student without graduating.
Also, for unsubsidized federal loans (those in which the government does not absorb the interest accrued during the time you’re in school) sometimes offer the student the option of making interest payments during the time they’re in school, taking a dent out of the bigger repayments afterwards.
The federal Grad Plus Loan, however, is different in that it requires repayment to begin immediately after the final disbursement is made for your particular amount. This usually means within a month after graduation, although the Grad Plus Loan can sometimes make arrangements for six-month forbearance so your payments can line up with other federal loans you might have.
Private student loans made to students directly
Private loan repayment terms vary as much as the lenders who make them, but generally, repayment begins 6-9 months after graduation. Some may allow you to make payments during school or perhaps just on the interest, but as this is where the lender typically makes most of their money on your loan, you may end up paying more front-end fees.
It's worth noting that some students actually graduate at one point during the year, but might not actually walk through graduation ceremonies until another part of the year or at all. Participation in commencement ceremonies has no bearing on the date your loan repayments begin; it’s based entirely on the date on which your school confers your completion status.
It's also important to remember that if you have a combination of private or federal loans, you may have different dates in which you will need to start making payments. Study the paperwork of your loan carefully if you haven’t already, and confer with your loan officers if you need to.