Understanding the details of repayment on federal student loans can save your student time and money. Find out
- what repayment plan options are available,
- when your student must begin making payments,
- how to make payments,
- how to pay off loans faster, and
- what to do if your student has trouble making payments.
I need more information about my student’s loan servicer.
Find out who services your student’s federal student loan(s).
Try This Resource
Federal Student Loans: Repaying Loans—Provides information about federal student loan repayment plan options, finding loan history and loan servicers, and making payments.
I need more information about the types of repayment plans available.
Learn more about Repayment Plans.
- When Your Student Must Begin Payments
- The Grace Period
- Making Payments
- Having Student Loans Forgiven
REMEMBER: Your student’s federal student loans can’t be canceled or forgiven because they didn’t get the education or job they expected or they didn’t complete their education (unless they couldn’t complete their education because their school closed).
Should my student refinance their federal student loans into a private loan?
As a federal student loan borrower, your student has certain rights that are not typically available with private loans. While refinancing federal student loans into a private student loan can sometimes lower the interest rate, private student loans will not necessarily have the same terms and conditions as federal student loans.
Your student should carefully review the terms of a private student loan before they give up the benefits available on federal student loans. The following are some examples of benefits that your student may lose if they refinance their federal student loan into a private student loan:
- Access to temporary loan payment relief through approved periods (deferment or forbearance) when your student does not have to make payments because of financial hardship, continuing their education, or military service
- No interest accumulation on subsidized student loans during periods when payments are deferred
- Access to repayment plans based on their income that provide loan forgiveness once your student has been in repayment for 20 or 25 years
- Access to various forms of loan forgiveness and discharge, such as Public Service Loan Forgiveness, teacher loan forgiveness, total and permanent disability discharge, and borrower defense to repayment discharge
When Your Student Must Begin Payments
Once your student graduates, drops below half-time enrollment, or leaves school, their federal student loan goes into repayment. However, if they have a Direct Subsidized, Direct Unsubsidized, or Federal Family Education Loan, they have a six-month grace period before they are required to start making regular payments. They’ll have a nine-month grace period if they’ve got a Perkins Loan. (Got a PLUS loan? They’ll go into repayment as soon as the loan is fully disbursed—which means once it’s paid out. But if your student is a graduate and professional student PLUS borrower, they will be placed on an automatic deferment while in school and for six months after graduating, leaving school, or dropping below half-time enrollment.)
Note: When your student’s loan enters repayment, their servicer will automatically place them on the Standard Repayment Plan. They can request a different repayment plan at any time.
Your student can make prepayments on their loan while they are in school or during their grace period. Be aware, however, that any prepayment your student makes will not count as a qualifying payment in any loan forgiveness programs.
Your student’s loan servicer will provide them with a loan repayment schedule that states when their first payment is due, the number and frequency of payments, and the amount of each payment.
Your student’s billing statement will tell them how much to pay. Their monthly payment amount depends on their repayment plan. If your student signed up for electronic communication, they need to pay attention to their email. Most loan servicers send an email when billing statements are ready for your student to access online.
The Grace Period
For most federal student loan types, after your student graduates, leave school, or drop below half-time enrollment, they have a six-month grace period (sometimes nine months for Perkins Loans) before they must begin making payments. This grace period gives your student time to get financially settled and to select their repayment plan. Not all federal student loans have a grace period. Note that for most loans, interest accrues during the grace period. The interest that accrues during the grace period will be added to the outstanding balance of their loan, but it will not be capitalized. This means that the unpaid interest might increase the monthly payment amount under a fixed payment repayment plan or increase the time to repay their loan in full under an IDR (Income-Driven Repayment) plan. Your student can always pay the unpaid accrued interest before entering repayment.
Loans and Their Grace Periods
Review this list to find out whether your student’s loan has a grace period.
- Direct Subsidized Loans and Direct Unsubsidized Loans have a six-month grace period before payments are due.
- PLUS loans do not have a grace period; but if your student received a PLUS loan as a graduate or professional student, they’ll automatically get a six-month deferment after they graduate, leave school, or drop below half-time enrollment. No payments are required during this six-month deferment period. If you’re a parent borrower who took out a PLUS loan to pay for your student’s education, you can request a six-month deferment after your student graduates, leaves school, or drops below half-time enrollment. Contact your loan servicer for more information.
- If your student received a Federal Perkins Loan, check with the school where your student received their loan.
Circumstances That May Affect Your Student’s Grace Period
Certain situations that may affect your student’s grace period include the following:
- Active duty military—If your student is called to active military duty for more than 30 days before the end of their grace period, they will receive the full six-month grace period when they return from active duty.
- Returning to school before the end of their loan’s grace period—If your student reenrolls in school at least half-time before the end of their grace period, they will receive the full six-month grace period when they stop attending school or drop below half-time enrollment.
- Loan consolidation—If your student consolidates their loans during the grace period, they give up the remainder of their grace period and begin repayment after their Direct Consolidation Loan is processed (unless they request to have the processing of their consolidation loan delayed until closer to the end of their grace period).
Making Payments
The U.S. Department of Education (ED) uses several loan servicers to handle the billing and other services on loans for the William D. Ford Federal Direct Loan (Direct Loan) Program and for loans that were made under the Federal Family Education Loan (FFEL) Program and that ED later purchased. Your student’s loan servicer will set them up under the Standard Repayment Plan unless they tell their loan servicer they want a different repayment plan.
| Type of Loan | Send Payments To | When to Send Payments |
| Direct Loans and FFEL loans owned by ED | Your student’s loan servicer | Check with loan servicer. |
| FFEL loans not owned by ED | The bank, credit union, or other lending institution that made the loan (also known as the lender) | Check with lender. |
| Federal Perkins Loans | Your student’s school or the billing agency their school designates | Check with school. |
To discuss repayment plan options or change the repayment plan, contact the loan servicer. First, though, your student can use Loan Simulator to get an early look at which plans they may be eligible for and see estimates for how much they would pay monthly and overall.
My student wants to get ahead by paying extra each month.
Your student can make payments before they are due or pay more than the amount due each month. Paying a little extra each month can reduce the interest your student pays and reduce the total cost of their loan over time. Contact the loan servicer to discuss these options.
My student is having trouble making their loan payment.
Contact the loan servicer as soon as possible. Your student may be able to change their repayment plan to one that lowers their monthly payment and, in some cases, may be based on their income. Your student can also ask their loan servicer about their options for a deferment or forbearance or loan consolidation.
Try this Resource:
Trouble Making Federal Student Loan Payments? provides information on what to do if your student is having difficulty making their student loan payments.
My student has missed one or more loan payments.
Stay in touch with the loan servicer—especially if your student is struggling to make payments on their loans. Their loan servicer will explain their repayment options, such as applying for an income-driven repayment plan or a forbearance or deferment, to help your student stay on track or get back on track when they fall behind.
One thing your student definitely wants to avoid is going into default! This occurs when they are at least nine months past due on their student loan. The consequences of default include damage to their credit rating and future borrowing ability. They may also include garnishment of wages and withholding of tax refunds. If your student can’t make payments, they should contact the loan servicer to find out their options.
Having Student Loans Forgiven
Your student is generally required to repay their student loan, but in certain situations, their loan may be forgiven, canceled, or discharged.
Additional Links:
Loan Repayment Checklist
Student Loan Consolidation
Student Loan Deferment
Student Loan Forbearance
Student Loan Forgiveness
Student Loan Delinquency and Default