One of the benefits of taking out student loans is that they are not due immediately after graduating. Because it could take some time to find a job, the government allows students a "grace period," or period between graduating and finding a job where they do not have to pay back their loans.
The standard grace period is six months, but could be extended to three years for those that are serving in the Armed Forces.
- Subsidized Stafford loans have a standard six-month grace period. You will not start accruing interest on these loans until you start paying them back. Keep in mind that if you drop out of school prior to graduation or reduce your status to part-time enrollment, your loans will become due immediately.
- Unsubsidized Stafford loans, on the other hand, do start accruing interest immediately, both while in school and during the grace period. They also have the standard six-month grace period.
- Perkins loans are loans offered to students that express financial need. With Perkins loans, the school is the lender and the grace period is nine months after graduating, dropping out or falling below part-time status.
- PLUS loans, or loans that are offered to the parents of a student to help them pay for school, do not have a grace period. Typically, repayment will be due within 60 days of the last loan disbursement.
Private lenders, such as your bank or an online lender, do usually offer grace periods, too. However, the amount of time you have is up to the lender, so make sure to read and understand the terms and conditions carefully.