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When Do You Start Paying Student Loans?

When Do You Start Paying Student Loans?
Chris Alexis
Chris AlexisUpdated October 31, 2022
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Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.
Most people who have federal student loans have a six-month or nine-month grace period after graduation before their first payment is due. The six- or nine-month grace period applies not only if you graduate but also if you leave school, or drop below half-time enrollment. Note that for most federal student loans, interest accrues during your grace period. You can choose to pay the interest that accrues during your grace period. This prevents that interest from being added to the principal balance (also known as interest capitalization).Because of hardship caused by COVID-19, payments on all federal student loans were suspended in March 2020. The pause is scheduled to end on Dec. 31, 2022.

Finding Out When Your Student Loan Payments Start

When you sign a contract for a federal student loan, it will be stated when the first payment is due. If you received a federal student loan, you are required to complete exit counseling before you graduate, leave school (for any reason), or drop below half-time enrollment. Exit counseling is a mandatory information session that explains your loan repayment responsibilities and when repayment begins.

Private Student Loans

These are loans from banks and other private companies, not the federal government. Sometimes they offer a grace period like the government. But usually, you have to begin repayment as soon as the funds are dispersed.With private loans, it’s important you read the fine print and speak with your lender to fully grasp your obligations.

Subsidized Student Loans

A subsidized student loan is a federal loan based on financial need, which you’ll need to document when filling out the FAFSA form. You will also have to disclose all grants and scholarships at this time.These have lower loan limits than unsubsidized loans and you won’t accrue interest on your loan—that cost is paid by the government. Also, these loans only apply to undergraduate students who are enrolled at least half-time.It’s important to note that subsidized loans are only given through the government. Private loans are not subsidized. 

Unsubsidized Student Loans

Like subsidized loans, unsubsidized loans are federal loans. The difference is that the government doesn’t cover the interest. These loans are often taken out by students who have access to a larger income.The loan limits are also typically higher. Additionally, these loans are available for students seeking undergraduate, graduate, or professional degrees. 

Student Loan Deferment

If the answer to “When does student loan repayment start?” makes you feel like you’re drowning financially, you may qualify for a student loan deferment. This allows you to temporarily postpone your repayments. Some people also seek deferments if they are going back to school or pursuing a fellowship. If you have a direct subsidized loan, a direct unsubsidized loan, or a grad PLUS loan, it will automatically be placed in deferment while you’re enrolled at least half-time in college and six months after. This is known as “in-school deferment.” Most private lenders offer something similar. But if you have a private lender, be clear on those terms.    Additional deferments include:
  • An in-school parent deferment is for Parent PLUS borrowers. It must be requested (not automatic) and will typically last while their child is in school and for six months after graduation or dipping below half-time enrollment.
  • If you’re having difficulty landing a job or receiving unemployment benefits, you may qualify for unemployment deferment, which can last for up to three years.
  • If you’re employed but earn less than 150% of the poverty guideline for your family size and state of residence, you may quality for an economic hardship deferment. This can also last for up to three years, but you will have to reapply every year.
  • You can also apply for an economic hardship deferment if you serve in the Peace Corps, however you won’t need to reapply annually.
  •   If you’re on active duty in the military, you could qualify for a deferment for the duration of your service and 13 months afterward.
  • If you’re battling cancer, you can apply to defer loans while undergoing treatment and six months beyond.
  •  For those in a different kind of treatment — for vocational, drug abuse, mental health, or alcohol abuse — the federal government offers deferment options.  
Deferment may pause payments, but interest continues to accrue for most loans, including direct unsubsidized and private loans. This means your balance will increase between the beginning and end of your deferment.Subsidized loans, by their nature, do not require interest payments from the lender. The same is true of Perkins loans.

Student Loan Forbearance 

Forbearance is similar to deferment in that you can pause your payments or make smaller payments. The difference is that borrowers in deferment are not required to pay the interest that accrues if they have a qualifying loan. But with forbearance, you cannot escape paying the accruing interest, no matter the type of loan.There are different types of forbearance. Most will require you to prove you’re eligible. You can apply for general forbearance if you have federal Direct Loans, Federal Family Education (FFEL) Program loans, or Perkins loans. This will be granted for no more than a year at a time. If that is not enough, you can request another — but the limit is three years.You can also pursue a mandatory forbearance. Your loan server must grant these if you can prove you’re eligible. Examples include:
  • You’re currently serving in AmeriCorps and received a national service award.
  •  The U.S. Department of Defense Student Loan Repayment Program will allow you to only partially repay your loans.
  •  You’re serving in either a medical or dental internship/residency program and meet particular requirements.
  •  You’ve been activated by the governor as a member of the National Guard, but you’re not eligible for a military deferment.
  •   If the total amount you owe each month for all your federal student is 20% or more of your total monthly gross income, you can pursue a Student Loan Debt Burden forbearance.
  •   You’re performing a qualifying teaching service.
While in forbearance, you have two options. You can pay the interest as it accrues. Or allow it to accrue and then be added to your loan principal balance at the end of the forbearance period.If you don’t do either, the total amount you will need to repay over the life of your loan may be larger.

Refinancing Student Loans

Refinancing is another route to explore. This involves a private lender paying off one or all your current loans and then giving you a new loan with a new rate. (And potentially a new lifetime.) There are pros and cons to refinancing your student loan.A lower interest rate means you’ll pay less over the life of the loan. New rates will depend on certain considerations, including your credit score, whether you choose a fixed or variable rate, along with how long you have to repay everything. You can also add a cosigner.Remember, you need a private lender to refinance. This means that for the amount of the loan that you refinance, you’ll lose access to programs like income-driven repayment plans and Public Service Loan Forgiveness, along with protections like federal deferment and forbearance options.  Furthermore, you won’t be eligible for federal loan consolidation: taking multiple federal loans and combining them into one loan for up to 30 years.You may apply and not be offered a low enough interest rate to make an appreciable difference in your monthly payment. Your interest rate depends on your creditworthiness, which can take time to build.

Loan Forgiveness Options

Student loan forgiveness means either some or all your repayment obligations disappear.Borrowers seeking forgiveness need to fill out an application, which can be procured through their lender.Examples include:
  •  The Public Loan Forbearance Program, which you may qualify for if you’re employed by the government or a non-profit organization.
  • If you teach full-time for five complete and consecutive academic years in a low-income elementary school, secondary school, or educational service agency, you might qualify for forgiveness of up to $17,500 on your direct loan or FFEL Program loans.
  • The Nurse Corps Repayment Program covers up to 85% of unpaid nursing education debt for registered nurses, advanced practice registered nurses, and nurse faculty.

How to Make Your Student Loan Payments 

If you’re 90 days late or more with your payment, your lender will report it to the three major national credit bureaus. It can get worse: If your loan goes into default, your tax refunds might be withheld, your wages could be garnished, and you could even see the inside of a courtroom.Pay more than the minimum if possible. This can shrink the interest you pay and reduce the total cost of your loan over time. You can get a leg up by using your tax refund money or any extra income to chip away faster at your obligations.

How Long Can You Wait to Start Paying Off Student Loans?

While the typical answer is six or nine months after graduation or dropping below half-time enrollment, deferment or forbearance can delay that. Further details depend on the agreement between you and your lender.

Is It Wise to Wait as Long as You Can to Pay Back Student Loans?

You may hear someone ask, “When do you have to start paying student loans? I’d like to put that off as long as possible.” But the longer they wait to pay back their student loans, the more interest will be accrued. 

Refinancing Student Loans

If you decide to refinance your student loans, Lantern by SoFi can help by allowing you to compare options. By offering all the information in one place, you can get a complete picture of your choices. Be aware that if you refinance your federal loan, that portion of your student loan debt will not qualify for federal forgiveness.
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Frequently Asked Questions

Do you have to start paying student loans off if you take a year off from school?
Do student loans have to be paid back within 10 years?
Are you required to start paying back student loans while in college?

About the Author

Chris Alexis

Chris Alexis

Chris Alexis has been putting pen to paper and fingertips to keyboard since his youth. He ultimately grew into an accomplished and award-winning writer who loves using the power of language to connect with audiences. He also strongly enjoys learning about who he is writing for so he can create something that will truly resonate with them. He has worked for a variety of companies, each of which have given him more experience and insight.
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