After you graduate, leave school, or drop below half-time enrollment, you may have a period of time before you have to begin repayment. This "grace period" will be six months for Federal (FFEL) or Direct Subsidized/Unsubsidized Loans.
(If you're a parent reading this and you have a FFEL or Direct PLUS Loan, you don't have a grace period. Repayment generally must begin within 60 days after the loan is fully disbursed unless you've requested that the payments be deferred until after your student graduates.)
The government pays the interest on Direct Subsidized loans, and no payment is required while you're enrolled in school at least half-time.
If you have an Direct Unsubsidized loan, no payment is required while you're enrolled at least half-time, but interest accrues from the time the loan is first disbursed. You have the option to make interest-only payments while in school, or to defer payments until you graduate or are no longer enrolled at least half-time. If you choose to defer payments, interest will capitalize, which means the interest will be added to the principal of the loan.
For Alternative/Private Education Loans, depending upon the lender, you may have payments due even while you're attending school.
If you can make payments while you're in school and during your grace period, it's a good idea. You will save money on interest charges and you will have less to repay after graduation.
If you have taken out a Federal student loan, Loan Exit Counseling is required when you graduate or leave college to help you understand your rights and responsibilities as a borrower. Your loan provider will notify you of the date loan-repayment begins and contact information. Remember, you are still responsible for repayment, even if you don't hear from your lender.
You have a choice of repayment plans if you received a FFEL or a Federal Direct Loan. Your monthly payment will depend on the size of your debt and the length of your repayment period. The links listed below under "More Resources" may provide available repayment options, including examples of monthly payments for different loan amounts, and other topics you need to consider when managing your loans. The importance of making your full loan payment on time either monthly (which is usually when you'll pay) or according to your repayment schedule cannot be emphasized enough. If you don't, you could end up in default, which has serious consequences. Student loans are real loans-just as real as real as car loans or mortgages. You have to pay back your student loans.
The U.S. Department of Education's National Student Loan Data System (NSLDS) allows you to access information on loan and/or federal grant amounts, your loan status (including outstanding balances), and disbursements made. Go to National Student Loan Data Systems (NSLDS) for Students.
Since federal student loans are usually less expensive and offer better terms than private student loans, you may want to consider exhausting your eligibility for federal student loans before resorting to private student loans.
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