A grace period typically follows this type of a change in student status. Most grace periods last between six and twelve months, depending on interest rates and the type of loan.
- Subsidized and unsubsidized Stafford Loans have grace periods of six months after graduation, during which time students can organize finances and find jobs. The difference, however, is that interest continues to accrue with unsubsidized loans, while there is no interest charge for subsidized loans until the day the first payment is due.
- Repayment of PLUS loans starts sixty days after the final loan disbursement; however, interest accrues as soon as you receive the first disbursement
- Perkins Loans allow grace periods of nine months.
At the end of the grace period, if the lending agency has not already contacted them, students are responsible for contacting the agency carrying their loan to inquire about repayment schedules and methods. Loan payments are usually made on a monthly or quarterly basis. As a borrower, you are responsible for making these payments on time. If you are very late or fail to make payments, your loan will become delinquent. Delinquency is defined as failing to make loan payments when they are due, and your loan will remain as such until the overdue balance is settled or other arrangements are made. Other arrangements for loan repayment are discussed within specific loan sections later in this report.Continue reading