Early planning for repayment of student loans can be extremely beneficial. As a borrower, you should know when repayment begins, how to make your payment, repayment plan options, and what to do if you have trouble making payments.
Federal Student Loan Repayment Information
Most federal student loans have a grace period for payment of six months after you graduate, leave school, or drop below half-time enrollment. However, interest does accrue during your grace period.
- Direct Subsidized and Unsubsidized loans have a six-month grace period before payments are due.
- PLUS loans have no grace period, but they may be eligible for a deferment. You will want to check into this option when considering applying for a PLUS loan.
The U.S. Department of Education uses several loan servicers to handle the billing for Direct Loans. Your federal loan servicer will contact you prior to your grace period. Please do not ignore the messages from your servicer. They will be providing valuable information regarding your account and repayment. Once you have selected your repayment plan, you will make payments to your loan servicer. For more information on repayment of federal student loans, please click here.
The Department of Education offers a "Repayment Estimator" that allows you to get an early look at which repayment plans you may be eligible for. It also allows you to see estimates for how much you would pay monthly and overall for your federal student loans.
*Private student loans are not included in the Repayment Estimator.
Direct Loan Repayment Plans
The Department of Education currently offers 7 different repayment plan options (listed below). To compare each of these plans, please click here.
- Standard Repayment Plan
- Graduated Repayment Plan
- Extended Repayment Plan
- Income-Based Repayment Plan (IBR)
- Pay As You Earn Repayment Plan
- Income-Contingent Repayment Plan (ICR)
- Income-Sensitive Repayment Plan
If you have multiple federal student loans, you can consolidate those loans into a single Direct Consolidation Loan. This could simplify repayment if you are making separate loan payments to different loan servicers, as you would only have one monthy payment to make. You will want to consider the advantages and disadvantages before consolidating.