Extending Your Student Loans Grace Period: Can You And Should You?

Having to repay student loans right out of school can be intimidating. This is why borrowers have a "grace period" with their loans. What is it and how is it helpful? Can borrowers extend this period to suit their circumstances? Is extending your grace period a good idea? Learn more.

Updated by B Harshitha on 17th February 2020

It is no surprise that a concern as mammoth as student loans remains lodged at the back of every student’s mind during the course of their education and even after. Student loan bills are likely to find their way to these kids on a regular and timely basis once their repayment phase begins. Most borrowers are sure to find an obligation to repay their loans right out of school quite challenging and possibly even strange. 

No borrower is likely to find themselves comfortably settled into a professional life and have a perfectly organized private life immediately out of school. They will have new concerns cropping up at this stage. So commencing their repayment almost instantly does not seem like a very feasible thing to expect. Enters something called a “grace period” to assuage these concerns.

Grace period is the time between a borrower leaving their school and the beginning of their repayment on their student loans. Most student loans come with a grace period of six months, although this may vary. 

But are six months enough to get settled? What if a borrower finds themself unable to fulfill their repayment obligations due to personal shortcomings? Can grace periods be extended?

Let us find out how student loans work around this tricky phase of a borrower’s life.


What is a grace period?

A grace period is the time between you leaving your school and the commencement of your repayment on your student loans. All federal loans and quite a few private student loans come with a grace period, although the time often varies loan to loan. 

A grace period is intended to allow the borrower to ease into their lives post school with one less concern, aka student loans. Borrowers might relocate, look for jobs and overall want to settle into a different pace in their lives after school. A grace period is likely to let them do that without worrying about repaying their student loans.

While this sounds very thoughtful and convenient, remember that your interest does not pause on accruing. 

How long do student loan grace periods last?

Grace periods vary with the type of student loan taken out and the lender involved. But remember that for kids who are thinking about taking a semester off, their grace periods begin as soon as they drop below half-time status. 

PLUS loans do not have a grace period. All other federal student loans have one.

Private student loans depend entirely on the lender.

Student Loan


Interest Status

Direct Subsidized Loans

6 months

If taken out between July 1, 2012 and July 1, 2014, any interest accrued has to be repaid. Otherwise, not.

Direct Unsubsidized Loans

6 months


Subsidized Stafford Loans

6 months

Not applied

Unsubsidized Stafford Loans

6 months


PLUS Loans

No grace period


Federal Perkins Loans

9 months

Not applied

Private student loans

Depends on the lender


How to avoid student loan repayment?

Extending your grace period is one option that borrowers may pursue. This can be done in the form of deferment or forbearance on their student loans. But this may not be the best idea. This is true more so for borrowers who do not have a job.

Federal loans come with a range of options and programs that can benefit borrowers in the long run such as forgiveness programs and income-driven repayment plans.

How to extend your student loan grace period?

The two main ways by which grace periods can be extended on student loans are:

  • If you have dropped below half-time status, you might want to go back to school. If you attend school full-time before your grace period is completed, your grace period may get extended up to six months before you fall below half-time status again.

  • If you are called at least 30 days before your grace period ends, going on active military duty can help you extend your grace period to another six months after your duty ends.

As for private student loans, you might want to talk to your lender about it.

Borrowers can qualify for a deferment if they partake in military service or are unemployed or serve for the Peace Corps.

If they do not qualify for deferment, they may apply for forbearance. These are offered when a borrower is in a medical internship or in a residency program or in a qualifying teaching position. This can also be applied for if your payments exceed 20 percent of your monthly income.

Some repayment strategies

Even while your grace period is still going on, you might want to think about setting up some strategies that could help make repayment easier for you:

  • Think about setting a repayment plan in place: There are a range of repayment plans available for both federal and private student loans, each with their own terms, rates and durations. Explore your options and pick one that is suitable for you.

  • Autopay: Loan providers will deduct their monthly payment amount directly from your account on a regular basis automatically. This may even come with a discount of 0.25% or 0.5% depending on the lender.

  • Make repayments if you can: Start making repayments because this can help reduce your interest getting accrued in the long run. 

  • Loan consolidation and refinancing: If you are facing multiple student loans with terms, rates, deadlines and payments of their own that are all hard to manage, you might want to think about consolidating them(if federal) or refinancing them. Consolidation will take all your loans and combine them to give you one payment. Refinancing is taking out one loan to repay all other loans and taking care of this new one. You will be given new rates, terms, etc. You only have to make one payment. Learn more before making any decisions.

Why extending your student loan grace period may be a bad idea?

Extending your grace period may be a bad idea because your balance will not pause to grow in that period. Postponing your student loan concerns may be a bad idea because it is hard to predict how things may be in the future. 

There are a number of plans like forgiveness and income-based repayment plans that can help borrowers benefit.  

With forgiveness programs, after a certain number of years of repayment, your remaining debt will be waived off. You may have to repay $0 if you do not have a job.

Bottom line

The prospect of having to repay your student loans may be quite intimidating after school. Some borrowers may find themselves unable to afford payments straight out of school. Grace periods, although a good relief, may not suffice. But a piece of good news is that there are many repayment plans that could help borrowers not break the bank. 

Think about the consequences that come with extending your grace period before making any bold moves.