When Is Student Loan Repayment Starting?

You may have heard that the Department of Education is making changes to the student loan repayment process. Here’s what you need to know about the upcoming changes and when they’ll take effect.

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Introduction

Student loan repayment usually starts six to nine months after you graduate, drop below half-time enrollment, or leave school. If you have trouble making your student loan payments, there are several repayment plans that can make your payments more manageable. You can also get deferment or forbearance on your student loans if you’re facing a financial hardship.

What is the Standard Repayment Plan?

The Standard Repayment Plan is the default repayment plan for federal student loans. Your monthly payments will be fixed, and you will have your loans paid in full within 10 years.

The main advantage of the Standard Repayment Plan is that you will save money on interest because you will pay off your loan faster. The disadvantage is that your monthly payments will be higher than with other repayment plans.

If you can afford the higher monthly payments, the Standard Repayment Plan is a good option because it will save you money in the long run. If you are having trouble making your monthly payments, you may want to consider another repayment plan with lower monthly payments.

What are the other repayment plans?

Other repayment plans are available to help make your monthly student loan payment more affordable. The repayment plan you choose will affect how long it will take to repay your loans.

The most important factor in choosing a repayment plan is understanding the difference between them. The repayment plans available to you depend on the type of loan you have:
-Direct Subsidized Loans and Direct Unsubsidized Loans—Standard Repayment Plan, Extended Repayment Plan, Graduated Repayment Plan, Income-Based Repayment Plan, Pay As You Earn Repayment Plan, Revised Pay As You Earn Repayment Plan, and Income-Contingent Repayment Plan
-Direct PLUS Loans for Parents and Direct PLUS Loans for Graduate or Professional Students—Standard Repayment Plan, Extended Repayment Plan, Graduated Repayment Plan, and Income-Contingent Repayment Plan
-FFEL Program Loans—Standard Repayment Plan, Extended Repayment Plan, Graduated Repayment Plan, Income-Based Repayment Plan (including revisions to such plan), Pay As You EarnRepayment Plan, Revised Pay As You EarnRepayment

What if I can’t afford my monthly payments?

If you’re having trouble making your monthly student loan payments, don’t wait to seek help. There are several options available that can make your payments more manageable.

You might be eligible for an income-driven repayment plan, which would lower your monthly payments based on your income and family size. You can also apply for deferment or forbearance, which would allow you to temporarily stop making payments or make lower payments.

If you’re having trouble making your student loan payments, the best thing to do is contact your loan servicer right away. They can help you understand your options and find a solution that works for you.

What are the consequences of defaulting on my student loans?

Defaulting on your student loans has serious consequences that can last for years. If you default, the entire unpaid balance of your loan and any interest is immediately due and payable. In addition, you will lose eligibility for deferment, forbearance, and repayment plans. You will also no longer be able to receive additional federal student aid.

Defaulting will also damage your credit rating for up to seven years, making it difficult to get a car loan, a mortgage, or even a credit card. Your wage may be garnished and your tax refunds may be withheld to repay the debt. Defaulting on your student loans can even lead to having your professional license revoked in some states.

How can I get help with my student loans?

There are a number of ways to get help with your student loans. You can contact your loan servicer, the organization that you make payments to, and ask about repayment options. You can also look into student loan consolidation or student loan refinancing.

If you consolidates your loans, you will have one monthly payment instead of multiple payments. This can make repayment easier. If you refinance your loans, you may be able to get a lower interest rate or change the terms of your repayment.

Conclusion

The answer to this question is not as straightforward as it may seem. Repayment on your student loans may begin immediately after you graduate, withdraw from school, or drop below half-time enrollment. However, if you have a grace period, you may not have to start making payments until after the grace period ends. Your loan servicer will contact you before your first payment is due and will provide information on repayment options and how to make your first payment.