It’s important to know when you need to start paying back your student loans. Read this blog post to find out when you need to start making payments on your loans.
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Student loans can feel like free money while you’re in school, but eventually, you have to start paying them back. The good news is that you don’t have to start repaying most types of student loans until after you graduate or drop below half-time enrollment.
The grace period is the time after you graduate, leave school, or drop below half-time enrollment before you have to begin repaying your loan. For Direct Subsidized Loans and Direct Unsubsidized Loans, the grace period is six months. For Perkins Loans, the grace period is nine months. If you have a Direct PLUS Loan for Graduate or Professional study, there’s no grace period — you must begin repaying your loan when the first bill arrives.
If you take out a Direct Consolidation Loan to combine your other federal student loans into one loan, the repayment term might be up to 30 years. This means your monthly payments will be lower because they’ll be spread out over a longer time period. But remember that although your monthly payments may be lower with a Direct Consolidation Loan, the total amount of interest that you pay over the life of the loan will generally be higher than it would have been with the original loans because now you may be paying interest for a longer time period.
Federal Student Loans
Federal student loans are loans made by the U.S. Department of Education to help pay for your education. The interest rate on federal student loans is set by Congress and varies depending on the type of loan and when it was first disbursed. You don’t have to start making payments on most federal student loans until after you leave college or drop below half-time enrollment. However, there are some types of federal student loans that require you to make payments while you’re in school.
##Type of Loan | When Payments Start
Subsidized Loans | 6 Months After Leaving School
Unsubsidized Loans | 6 Months After Leaving School
Parent PLUS Loans | When the Loan is Fully Disbursed
Grad PLUS Loans | When the Loan is Fully Disbursed
Perkins Loans | 9 Months After Leaving School
Private Student Loans
Private student loans are not funded by the federal government and typically have fewer repayment options and higher interest rates than federal student loans. The repayment terms for private student loans vary by lender, but most loans require repayment to begin within 60 days after graduation. Some lenders offer a grace period of 6 months before repayment begins.
When Do You Have to Start Paying Your Student Loans Back?
The short answer is, you don’t have to start paying most student loans back until after you graduate. The repayment term for federal student loans is usually 10 years, but it can be up to 25 years for some private loans.
For federal student loans, there is a six-month grace period after you graduate or leave school before you have to start making payments. If you took out any private student loans, check with your lender to find out when your first payment is due and if there is a grace period.
There are some types of federal student loans that have shorter grace periods or no grace period at all. For these loans, you may have to start making payments while you’re still in school—or even make interest-only payments. Stafford Loans have a six-month grace period and PLUS Loans have no grace period. If you consolidate your federal student loans, the repayment term will usually be 10 to 30 years, depending on the amount you owe.
You might also have to start paying back your student loans sooner if you go into deferment or forbearance. In deferment or forbearance, your loan payments are postponed for a certain amount of time. You’ll still accrue interest during this time, though, so your loan balance will grow bigger while you’re not making any payments toward it.
What Happens If You Don’t Pay Your Student Loans?
There are a number of consequences that can come from defaulting on your student loans. Not only will your credit score be negatively affected, but you may also be sued, have your wages garnished, or have your tax refunds seized. In some cases, you may even go to jail. If you default on your student loans, it’s important to take action as quickly as possible to get back on track.
How to Avoid Defaulting on Your Student Loans
No one wants to default on their student loans, but it can happen. If you’re struggling to make your payments, there are some things you can do to avoid default.
If you’re having trouble making your payments, the first thing you should do is contact your lender or servicer. They may be able to work out a new payment plan with you. You can also look into deferment or forbearance, which will allow you to temporarily stop making payments or reduced your payment amount.
If you’re still having trouble, there are a few other options available. You could consolidate your loans, which would lower your monthly payment amount. You could also look into refinancing, which could get you a lower interest rate and monthly payment.
Defaulting on your student loans has serious consequences. It can damage your credit score, making it harder to get a loan in the future. It can also lead to wage garnishment, meaning the government could take money out of your paycheck to repay your loans. So it’s important to do everything you can to avoid defaulting on your student loans.
In conclusion, when do you start paying your student loans back? If you have federal student loans, you don’t have to start making payments until after you graduate. If you have private student loans, you may have to start making payments while you’re still in school.