When Do You Have to Pay Student Loans Back?
Higher education offers students the opportunity to pursue any career they dream of, from artist to zoologist. But making their dreams affordable usually means taking out student loans, often in the tens of thousands of dollars. Loan payments are suspended while students attend school full-time, but graduation begins the countdown to student loan repayment.
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Stafford and Perkins Loans
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The most common types of federal student loans are Stafford loans -- which include the Direct Loan Program and the Federal Family Education Loan Program -- and Perkins Loans, available to students with unusual financial needs. Repayment for Stafford loans begins six months after the student graduates or leaves school. For Perkins loans, repayment begins nine months after graduation, or the end of matriculation.
PLUS Loans
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The Federal PLUS Loan program is available to an undergraduate student's parents or to graduate students, providing low-interest loans to finance education. Repayment of PLUS loans begins 60 days after the date of the loan's final disbursement. Loans issued after July 1, 2008, allow repayment to be suspended while the student is enrolled in school at least half-time, and for a six-month grace period after the student leaves his half-time or greater enrollment.
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Deferral
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A deferral allows borrowers to postpone making loan payments due to specific circumstances defined by the loan. For loans issued on or after July 1, 1993, deferrals are granted if the borrower is enrolled as a full-time student or as a graduate student, is unemployed or experiences significant economic hardship, or if the student becomes totally disabled or is enrolled in rehabilitative training. Deferrals for loans made before July 1993 may also be granted for service in the Armed Forces, the Peace Corps or as a teacher in a deprived area, or for returning to work after giving birth. Application for a deferral must be made within eight months of becoming unable to repay the loan.
Forbearance
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Borrowers can also request a forbearance from their lenders, which temporarily suspends loan repayment, though interest continues to accrue. Forbearance without making loan payments can be granted for up to 12 months for borrowers who are suffering from poor health, or who are experiencing temporary financial hardship. Borrowers may also receive an extension of their due dates or a revision of their payment schedule, providing for lower monthly payments.
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References
- Photo Credit graduation image by Andrey Kiselev from Fotolia.com
