How Long Typically Is A Grace Period For Federal Student Loans

With all the different types of loans out there, it can be difficult to know what to expect when it comes to repayment. For student loan borrowers, one of the most common questions is how long is grace period for student loans?

The grace period is the time between when you graduate and when your first payment is due. It is designed to give you a chance to get settled into your new life before having to start paying back what you owe on those pesky loans. But just how long is grace period for student loans? The answer may surprise you.

How Long Is Grace Period For Student Loans?

In most cases, the grace period for federal student loans lasts six months after graduation or dropping below half-time enrollment status at an eligible institution. This means that as long as you don’t go more than six months without making a payment, there won’t be any late fees or penalties assessed against your account. However, if you do go over six months without making payments, then not only will you have to pay any penalties and late fees that accrue during that time but also interest on top of that amount so that everything gets paid off in full once again (and then some).

There are some exceptions though

How Long Typically Is A Grace Period For Federal Student Loans

A grace period for student loans is a stretch of time, after you’ve graduated or left school, when you’re not required to make payments. Most student loans have a six-month grace period.

The federal student loan forbearance paused payments since March 2020 and will continue through Aug. 31, 2022 with no interest accruing during that period. If you graduated during that time, your six-month grace period may have overlapped with the forbearance wholly or in part. The forbearance will not extend or delay your grace period.

The length of a student loan’s grace period varies by loan type. Here’s how long you’ll have before repayment starts for different loans:

• Federal direct subsidized and unsubsidized loans: Six months.
• Federal Stafford subsidized and unsubsidized loans: Six months.
• Federal direct PLUS loans for graduate students: Six months.
• Federal direct PLUS loans for parents: Six months, if requested on the loan application.
• Federal Perkins loans: Nine months.
• Private loans: Varies by lender. Some offer a post-graduation grace period of six months, while others require payment as soon as the loan is disbursed. Check your loan agreement or ask your lender if you’re not sure.

For recent graduates, the grace period on private student loans will end as originally scheduled in your loan agreement.

When does the student loan grace period start?

For federal student loans, and most private loans, grace periods start when you fall below half-time enrollment. That can happen when you graduate, withdraw, take a gap year or drop classes. Schools have different definitions for half-time enrollment, so check with your financial aid office if you change your class schedule.

If you re-enroll at least half-time before your student loan grace period ends, you’ll receive its entire length in the future. For example, say you start grad school full time five months after graduating. When you finish your graduate program, you’d still have the full six-month grace period for your undergraduate loans. 

Does interest accrue during the grace period?

Federal student loans are not accruing interest through Aug. 31, 2022.

But interest will typically accrue during your grace period unless you have federal direct subsidized loans — just like it did while you were enrolled in school. If that interest capitalizes, you’ll have a bigger balance when your loan enters repayment.

If you have subsidized loans, interest will start accruing on those loans once they enter repayment.

student loan grace period extension

After you leave school, you’ll usually enter a six-month grace period before you need to start making payments on your federal student loans. 

A grace period may be extended in certain situations:

• You’re called to active military duty for more than 30 days before the end of your grace period. Your six-month grace period will start when you return from active duty.
   
• You reenroll in school at least half time before the end of your grace period. Your six-month grace period will start when you stop attending school or drop below half-time enrollment.

If your grace period ends during the payment pause, your loan payments will remain paused, and your interest rate will stay at 0% until the pause ends.