Going to college opens opportunities for growth, higher salaries, and much more. Sounds ambitious? It is! but it comes with a cost. And this cost isn’t just a pinch, it’s more like what atlas had to go through. But instead of you carrying the world, it’s you carrying a heavy ball of debt. When you go about thinking of ways to pay your college tuition you can apply for scholarships, grants, or student loans.For a student who hasn’t qualified for a scholarship or hasn’t received any grant then the last and final option available for him/her is a student loan. To make any smart move concerning funds, you must have an exhaustive knowledge to make the right decision.
A student loan is an amount of money borrowed from the federal government, an organization, or a financial institution as a way to help pay for your school. It has to be paid back over time with a fraction of the interest rate. Student loans are usually used to cover the cost of tuition fees, books and supplies, and living expenses.
Selecting the best student loans for your financial requirements is a big deal because understanding the pros and cons of the different types of loans is a huge step before taking a loan. Comparing your options will help you find the best deal for your needs.
Below is the list of student loans, these loans comprise best interest rates, loan terms, and other protection benefits.
| Serial No. | Loans | Rate of interest |
| 1 | Federal Student Aid (Direct Subsidized) | 2.75% |
| 2 | Federal Student Aid (Direct Unsubsidized) | 4.30% |
| 3 | Federal Student Aid (Parent PLUS) | 5.30% |
| 4 | Citizens Bank Student Loan | 4.25% |
| 5 | College Ave Student Loan |
Fixed - 4.44% - 15.32% Variable - 4.74% - 15.32% |
| 6 | Sallie Mae Student Loans | Fixed - 3.50% - 12.60% APR¹ Variable - 1.37% - 11.48% APR¹ (with autopay) |
| 7 | Discover Student Loan | 4.24% |
| 8 | IHelp Student Loan | 7.50% |
| 9 | Edvestinu Student Loans | 4.092% |
| 10 | Raise Private Student Loans | 5.33% |
| 11 | Connext Student Loan | 6.89% |
Whether you’re an undergraduate, graduate student, or parent, student loans from The College Monk in partnership with Sallie Mae® could help!
Sallie Mae® higher education loans are designed for the needs of undergraduates, graduate students, and parents.
- Competitive interest rates
- Multiple repayment options
- No origination fees; no prepayment penalty³
Learn which loan is right for you
If you are looking for student loans to help cover the costs to get a degree, here are some loans you will be interested in.
Apart from those listed in the table above, there are some online platforms like credible which one can use, to help decide on a loan.
For both government and private student loans, you'll have to go through an application procedure to see whether you're affirmed and how much cash you're permitted to get. You'll additionally find out about your repayment terms. When you're guaranteed for a student loan, the cash will be dispensed to your school to take care of all the educational expenses.
The procedure for verifying a student loan is distinctively relying upon whether it's federal or private. Realizing the distinctions is vital to guarantee that you get the best repayment terms for your circumstances.
There are mainly two types of student loans offered to students who are private and federal student loans. The Federal Government offers Federal student loans, whereas the Banks offer Private Student Loans.
It is advised for borrowers to try and explore all the options available to them. There are different procedures a borrower must go through for federal and private student loans. It is advised to first exhaust yourself of the federal options available to you then seek out for private options. It is also important to know how student loans work.
To check what federal loans you are eligible for, you need to fill out a form called the FAFSA ( Free Application for Federal Student Aid) as it is the best place to start.
Federal Student loans are the loans provided by the federal government. These loans come with more benefits than private loans. Student loans are either got by the government or from private sources. Before you decide on which is the best federal student loans suited for you, it is advised to have an in-depth understanding of how they work, how to get one, and much more.
While taking out a loan for your studies it is important to note who is making the loan. Federal loans are classified as the following-
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Federal loan types |
Description |
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Direct Subsidized student loans |
Loans used to provide to the borrower based on financial needs. These loans are made available to undergraduate students. |
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Direct Unsubsidized student loans |
Loans credit ratings and in this case, the school decides how much money can be borrowed based on the cost of attendance, credit score, and financial aid received. These loans are made available to undergraduate, graduate, and professional students. The eligibility for these loans is not based on financial need. |
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Direct PLUS loans |
Loans that are lent only based on the credit score of the student or parent and preferably chosen over as it has low-interest rates and can be repaid soon. These loans are made available to graduate or professional students and parents of undergraduate dependent students. It should be noted that borrowers with an adverse credit history must meet additional requirements to try and qualify. |
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Direct Consolidation Loans |
Loans that are got when you combine all the eligible federal loans into a single loan with a single servicer. |
To apply for a federal loan, you must go to the official website of the Federal Student Aid page and follow the steps mentioned below:
Here are the steps to fill up FAFSA
1) Create your FSA ID - Your ID will be a username/password combination that will give you access. You can take access and then go ahead to fill the form online. This ID will help you access information regarding your financial aid for the years to come and also information on the student loans you will have to repay once you graduate. If you are dependant then your parents/ guardians will have their FAFSA ID. The ID has to be exclusive and cannot be made on behalf of somebody.
2) Obtain the relevant documents - It is advised to keep all relevant information so you can fill the form with ease. A lot of financial information will be asked of you when you have to fill the form so keep the required documents ready.
3) Refer a guide that contains the structure and relevant queries in the FAFSA form - Everyone won’t have to fill the form the same way, a lot of the form depends on the individual's family circumstances. It is different for dependent and independent students. Immigration status will also vary between applicants.
4) Make use of the IRS data retrieval tool - It is common for one to make mistakes while filling up a form. But the FAFSA is too important a form to afford any costly mistakes so if you are looking to avoid making any mistakes then you should transfer your federal tax return information directly into your FAFSA with the help of the IRS Data Retrieval Tool. Accessing the tool is easy just click on the “Link to IRS” to prefill the form with your information.
5) Have a predetermined list of colleges you want to apply - It is important to have a list of schools ready before you fill the FAFSA form. While filling the form you will have to fill up the school codes for up to 10 schools. These are the schools you plan on applying to. In case you doubt the school codes then you can look up the codes at the Federal student aid website.
In case you haven’t decided which are the schools you want to apply too then you should fill the form. Once you decide on a school you can update the application. All of the schools listed will receive the information you filled in your FAFSA form.
After filling the FAFSA form
Once you are done filling the FAFSA form you can go ahead and complete any additional financial aid forms if required and review your Student Aid Report.
If there are mistakes you can go ahead and update your FAFSA if necessary. If you are selected by a particular school then you’ll be notified by the financial aid’s office. You will be asked to submit documents that support the information that was included in your FAFSA.
In case you feel like you need to be awarded more than what you got, you can appeal. You will have to renew your FAFSA every year of college.
Getting educated is a huge investment in this day and age but it cannot be compromised. The doors and opportunities that open up for you once qualified is immense, but the costs of education are what hinders people. One should consider federal student loans as a source of financial aid because of the following reasons-
Federal student loans have lower interest rates when compared to private student loans. These rates are fixed, which means they are independent of the market fluctuations. It should be noted that the rates offered are lower than the rates associated with your credit card payments
Most of the federal student loans do not require a credit check or a co-signer
The repayment of your federal student loans does not begin until you finish college. You will be given a grace period as well which your servicer must honor
If a borrower can demonstrate a financial need one can receive subsidized federal student loans where the interest payments are covered by the government
One can avail of several flexible repayment plans when the borrower goes about repaying the loans. You can also postpone any payments to be made once you face any difficulty while repaying
If you take up certain jobs or at organizations that are designated as non-profit then you can qualify to get a portion of your loans forgiven. Given that you meet all the required conditions
Student loans are used by college students to help pay for their educational expenses. Federal student loans are affordable and come with several benefits for the borrower but they may not be the go-to solution for every student. Here are some of the potential drawbacks associated with federal student loans -
Graduate students do not have access to subsidized federal direct loans. The subsidized federal direct loans are made available only to undergraduate students
Loans given to graduate students have a higher interest rate as compared to the loans given to undergraduate students
A borrower will not be able to discharge his/her loans if they have declared bankruptcy
Those borrowers who are unable to make payments can find relief by a provision under a category called “undue hardship”. But it is quite difficult to qualify for this category so the benefit offered is limited
Limits on the borrowing capacity for unsubsidized loans. Although one can qualify for these loans regardless of their credit, grades, or financial need, each year you can borrow an amount which ranges from $5,500 for dependent undergraduate students and $20,500 for graduate or professional students. Apart from these borrowing limits for each year, there are also total loan limits
Here are some repayment plans one can explore-
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Repayment Plan |
Borrower Eligibility |
Eligible Loans |
Monthly payment details |
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Standard Repayment Plan |
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Graduated Repayment Plan |
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Extended Repayment Plan |
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Revised Pay As You Earn Repayment Plan (REPAYE) |
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Pay As You Earn Repayment Plan (PAYE) |
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Income-Based Repayment Plan (IBR) |
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Income-Contingent Repayment Plan (ICR) |
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Income-Sensitive Repayment Plan |
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One thing to keep in mind is that many Repayment Plans do offer the option to forgive the remaining amount after a certain number of on-time payments over a duration of time, but the amount forgiven by these programs is still considered taxable by the IRS.
The loans that are offered by private lenders are referred to as private loans. These loans that are used for education purposes are referred to as private student loans. The private lenders out there are credit unions, national banks, online lenders, or even your local bank.
College tuition is quite overwhelming and there are situations where a student still can’t cover up all his expenses after exhausting his federal options. Then the only option left for a borrower is to go ahead for private student loans.
These loans can cover up your costs whether you are in a graduate or undergraduate study program.
These loans are provided by private banks or money related establishments to pay for the educational cost charge. These Private student credits are typically not justified, despite any potential benefits as they have a high rate of interest collected on it, which will finish up in paying twofold the measure of the educational cost charge at the season of reimbursement of the advance.
Apart from the coverage of tuition costs, private student loans can be used to cover other costs as well. If you are a medical student and you are pursuing your residency then you can use private student loans to help cover costs incurred during your residency.
Another situation is for those borrowers who are going to study for the bar as a law student. A lot of money goes into preparation for the bar exam and these loans help you cover these costs which could not have been met with the help of federal student loans. These kinds of loans are known as bar study loans.
Examples are - Sallie Mae Bar study loan, PNC solution for Bar study, Discover Bar exam loan, Wells Fargo Bar Study Loan, and more.
There are several lenders out there who provide private student loans for both parents and students. It is quite difficult for a student to try and qualify for a loan on his/her own. We will get into the details of qualifying for a student loan later on but in short, a borrower should have proof of income and a good credit score. Another option out there is a co-signer, who can help you qualify for the loan. One must be well aware of the conditions of getting a co-signer on board and what the options available for the co-signer release.
Finding the best private student loans for you is closely related to determining the lender to loan you money for your educational endeavors can play a huge role in your finances once you’ve completed your studies and are starting as a fresh graduate for work. The interest rates differ for each lender and can be of the fixed and variable type along with different repayment terms.
To make it easier for you as a prospective loanee, we have listed some of the top lenders for you to consider -
| LENDER | LOAN TERMS | FIXED APR | VARIABLE APR |
ELIGIBLE DEGREES
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| Ascent | 10 or 15 yrs | 3.24% - 11.33% | 2.46% - 9.09% |
Undergrad and Graduate
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| Citizens Bank | 5,10,15 yrs | 4.40% | 2.83% - 10.91% |
Undergrad and Graduate
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| College Ave | 5,8,10,15 yrs |
Undergrad - 4.44% - 15.32% |
Undergrad: 4.74% - 15.32% |
Undergrad and Graduate
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| Discover Student Loans | 15,20 yrs | 5.09% - 12.89% | 3.15% - 11.37% |
Undergrad and Graduate
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| InvestEd | 5 - 15 yrs | 4.09% | 3.12% |
Undergrad and Graduate
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| Sallie Mae | Undergrad 10-15 yrs Graduate 15 yrs |
Undergrad - 3.50% - 12.60% (with autopay) Graduate - 4.75% - 12.11% (with autopay) |
Undergrad - 1.13% - 11.23% (with autopay) Graduate - 2.12% - 11.64% (with autopay) |
Undergrad and Graduate |
| SunTrust | 7, 10, 15 yrs | 3.82% - 11.05% | 2.64% - 10.18% |
Undergrad and Graduate
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Keep in mind that it can take up to 30 days for completion of your loan applications and you should plan accordingly and apply to your desired lenders.
A federal loan application revolves completely on FAFSA, but to get a private student loan, you need to apply separately with a lender. Make sure you make a thorough comparison between different student loans. Here are the steps a borrower should follow if they decide to go for private student loans.
1) Conduct your research - Private student loans differ from lender to lender with different terms and conditions to be met and the best place to start is your google page to conduct proper research. A loan may be suited for a particular borrower but might not suit another since each borrower's financial conditions vary. It is important to check with the school financial aid office to get an idea of which lender to choose from. The schools usually have a preferred lender list.
A borrower can have his/her way of coming up with the list of lenders. Regardless of the way of picking a lender one must keep the interest rate, payment terms, repayment period, and the fees in mind. While shopping for a lender you can always pre-check an application as this will not conduct a hard check so your credit score will not be affected.
Take up many pre-applications as you can with lenders you want to consider and then once you decide you can apply. When you apply then a hard credit check is conducted which can affect your credit score, although it is possible to get student loans with no credit check.
You can decide on the borrowing amount once you have shortlisted a college.
2) Fill out your application at the right time - Unlike federal student loans where you have to follow the FAFSA deadlines the private student loans do not have a deadline. A borrower can seek aid from these loans throughout the year.
Although you may not have any deadline it is advised not to start an application with only a few days or weeks left for the payment of the tuition. Processing a student loan application can take up to two months or even more. So it is advised to have an ample amount of time to stay on top of any costs and expenditures.
3) Consider a co-signer (if required) - For those borrowers who do not have a good credit history or who don’t earn a high income they must consider a co-signer to get approved for a loan. There are even students at the graduate level who consider a co-signer since they do not have a satisfactory credit score.
The next big question is where do I get a co-signer? It is always advised to try and get a co-signer who is a close friend or someone from your family. Many borrowers mistake that getting a co-signer on board will get them off the hook during repayment. You will have to repay the loan along with interest. When you miss a payment and let your loans fall into delinquency then you hurt not just your credit but also your co signer's credit as well.
4) Get all the required documents for application - If you decide to go ahead with a private loan with or without a cosigner you will have to provide certain financial information. Given below are some of the documentation to keep in hand during the application for a private student loan.
Social security number
The applicant's personal information - date of birth, phone number, and home address.
A list of the borrower's assets and their respective values.
Mortgage details
Applicants latest tax returns
Information regarding the applicant's employment
A personal reference
5) Fill up the formal application for a private student loan - Every private lender has their process to apply for a loan, but the documentation required remains fairly the same. The formal application will ask you to provide some personal information and also the co signer's info if you decide to get a cosigner on board.
You will further be asked to provide financial information, which could be details related to your tax returns or pay stubs. This will be followed by providing school information which could be your loan period, loan amount, and graduation date. A few lenders might even ask for a personal reference. Be sure to check the lender's terms and conditions and then go forward with the application process.
Before you go ahead with private student loans you need to consider both sides to understand it is right for you. Here are the pros and cons of private student loans -
Pros of private student loans
Unlike federal loans that are limited in size, private student loans can cover the total cost of attendance(COA).
In certain cases, the borrower can receive a lower interest rate with a private lender instead of going ahead with the federal direct program
A borrower can get additional discounts with private lenders. One example would be the auto pay reduction of 0.25% on the interest rate
The application process and disbursement of funds with private student loans is shorter
Parents with a good credit score but don’t want to be the primary borrower of the student can seek refuge with the private student loans available to them
Private lenders have attractive cosigner release options.
Cons of private student loans
A credit check is done before the loan is offered
Cosigners are expected to have a credit score rating of 720 or higher
The interest rate offered is usually variable so the rate can increase or decrease over the life of the loan instead of being constant
There are cases where the borrower might have to start repaying the loan while still in school
The repayment plans that are offered are not as flexible as the ones offered by the federal direct program and it becomes to difficult to borrow mortgages. Learn more about taking mortgages while having student loan debt.
Before opting for loans, it is important to know the difference between a federal loan and a private loan for education.
The key purpose of loan advances is in the expense and utilization of FICO assessment in deciding the qualification
College students applying for Federal loans won't need to experience the credit check. The credit can be denied if there is clashing data present in his financial record
The financing cost on the federal loan is fixed and the loan cost on the Private student credit can be variable or fixed and they are generally high
Students understudies show that monetary needs could get a bureaucratic financed advance where the government will pay their interest until you graduate. A private student loan is never sponsored and you have to pay all the interest
Federal student loans offer adaptable reimbursement choices and credit absolution programs. The private student loans have few reimbursement alternatives and no advance absolution programs
Federal student loans don't need to be paid until you are graduated or dipped under half time as loan status. Numerous Private lenders request reimbursement while you are still in school.
| Loan Type | Subsidization | Income-Driven Repayment Plan | Forgiveness |
| Federal student loan | Yes (certain loan types) | Yes | Yes (if qualified) |
| Private student loan | No | No | No |
It should be noted that private student loans are generally more expensive than federal student loans. With a fixed interest rate you will have to make the same amount of interest payments until you finish paying off the loan completely. Variable interests are tricky as they might seem low in the beginning but they are subjected to market risks so they can increase exponentially later on during the repayment period.
Be well aware of what you are getting into, especially when it deals with loans. A loan might seem attractive but be well aware of all the terms and conditions and not just the repayment terms. Loans can help you get the future you deserve or they can haunt you forever.
Looking to tackle the rising interest rates by refinancing your loans? Refinancing is a good step to help make your debt more manageable but it isn’t for everyone. Let's break it down.
There is nothing fun about paying back student loans except when you save some money. This can be done by managing your debt the right way, so if you have several loans to manage it well would be to consolidate the loans into a single loan with a lower interest rate. With this, you have to just make a single payment each month so it is much easier to track.
In the current scenario, we have the student loan debt piling up and with this rising benchmark rate, the variable rates are also expected to go up to.
When you refinance with a fixed interest rate you are safeguarded from the rising rates.
Student loans can be refinanced through private banks, online lenders, or credit unions that refinance student loans.
As we discussed earlier, refinancing is not for everyone but you consider refinance you need to check whether your current situation is best suited for refinancing. Here are some factors to consider if you are ready to refinance :
1) Credit score - With a credit score of 700 or more you can easily qualify for a loan. There are several online sites where you can check your credit score. If you have a low credit score you can work towards improving the score.
2) Maintain a low debt to income ratio - The best way to do this is to make more money than you spend. When we say debt we refer to not just your student loan debt but the debt on your credit card, car loans, mortgage, and much more.
Consolidation of student loans is nothing but combining multiple loans into a single loan, upon doing this you get a new interest rate, repayment term, and more. You can consolidate your private loans or your federal loans.
The consolidation of private loans or private loans and federal loans is often referred to as refinancing. Consolidation and refinancing are often used interchangeably but they are completely different.
In federal student loan consolidation, you combine multiple federal student loans into a single direct federal loan. This is done through the department of education. When you consolidate your loans you get a direct loan which makes you eligible for certain loan repayment programs, it should be noted that you won’t get a lower interest rate. In case you want to start making lower payments, it is suggested to increase your repayment term.
Refinancing which is also known as private consolidation is done by a private lender. You need to look out for the qualifications to be eligible to refinance with them.
The Free Application for Federal Student Aid (FAFSA) is a form that is used to award financial aid from the government, states, colleges, and other organizations. This form helps the applicants to get access to grants, scholarships, work-study programs, and federal student loans.
If you are making plans to go to college then filling the FAFSA should be a number one priority as this is the best place to discover various federal loans. While you are still in college you can submit the FAFSA, you can submit it each year.
The amount you can borrow depends on whether you are an undergraduate, graduate, and professional student or a parent.
Undergraduate student - under the direct subsidized and direct unsubsidized loans the maximum amount you can borrow varies from $5,500 to $12,500 per year. This amount depends on which current year of study the applicant is in and the dependency status of the applicant.
Graduate or professional student - An applicant can take up to $20,500 each year under the direct unsubsidized loan program. Direct PLUS loans can also be used to help cover the remaining costs of tuition. Given that this remaining amount is not covered by other financial aid.
Parent - If you are the parent of a dependent undergraduate student then you are eligible for a Direct PLUS Loan which can help cover the remainder of the tuition which is not covered by financial aid.
To get a federal student loan, you need to apply for it by completing and submitting the Free Application Federal Student Aid (FAFSA) form. Based on the results awarded to the applicant, the college will send a financial aid offer. This offer will include federal student loans.
Further instructions on how to accept all the loans included in the offer or just a few of the loans included will be done by the school.
Before you receive any funds you will need to -
Finish entrance counseling. This is nothing but a tool to help the borrower understand his/her obligation to repay the loan
Sign a Master Promissory note. This note shows that the borrower agrees to the terms and conditions of the loan
It is important to contact the financial aid office at the school you are planning to attend. The process differs from school to school so it is important to get in touch and get details specific to the process at that particular school.
A loan servicer is a company that the government assigns to you when you take a federal student loan. They handle matters of billing and other issues related to your loan on behalf of the government.
These loan servicers make loan handling a more transparent process as they dissipate information to borrowers and avoid them from being in a bubble of unawareness. A loan servicer will work with you to find the best repayment option for you, help you with repayment, keep track of your repayments, and will help you in case of any change in circumstances. If the idea of having a loan servicer sounds pleasing to you, it’s about to get even better.
The government will assign a servicer to you once the loan is issued. The servicer will contact you.
To discover out who your loan servicer is, call the Federal Student Aid Information Center (FSAIC)? at 1-800-433-3243.
If your loan is for the current or upcoming school year, contact your school’s financial aid office directly for information about the status of your loan, the timeframes for canceling all or part of your loan or loan disbursement, the amounts, and timing of your loan disbursement. Only your school's financial aid office can provide this information.
If your loan was disbursed in a previous school year and you’re still in school, keep your contact information up to date with your school and contact your loan servicer when you withdraw, graduate, drop below half-time enrollment, or stop going to school. If you’re no longer in school, contact your loan servicer when you change your name, address, or phone number; need help with your loan payment; have a question about your bill; or have other questions about your student loan.
If you have FFEL Program loans that are not owned by the ED, contact your servicer for details about repayment options and tools. If you are not sure about who your servicer is, look for the most recent communication from the entity sending you bills for your payments. If you have Federal Perkins Loans that are not owned by ED, contact the school where you received your loan for information about repaying your loan. Your school may be the servicer for your loan.
If you have HEAL Program loans and you’re not in default, contact your loan servicer for help with account-related questions. Use the contact information your loan servicer provided to you. If you are not sure about who your servicer is, look for the most recent communication from the entity sending you bills for your payments.
If you have HEAL Program loans and you’re in default, contact the Debt Collection Center for help with account-related questions.
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 they do work with deferments. If you get a PLUS loan as a graduate or professional student, you’ll receive a six-month deferment after you graduate, leave school, or drop below half-time enrollment. No payments are required during the deferment period. If you are a parent who took a PLUS loan to pay for your child, you can request a six-month deferment after your child graduates, leaves school, or drops below half-time enrollment. Contact your loan servicer for more information.
If you got a Federal Perkins Loan, check with the school where you received your loan from.
Active military duty—If you are called to participate in military duty for more than 30 days before the end of your grace period, you will get the full six-month grace period when you return from your duty.
Returning to school before the end of your loan’s grace period—If you choose to re-enroll in school at least half-time before your grace period ends, you will receive the full six-month grace period when you stop attending school or drop below half-time enrollment.
Loan consolidation—If you consolidate your loans during your grace period, you give up the remainder of your grace period and begin repayment after your Direct Consolidation Loan is processed (you may also request to have the processing of your consolidation loan delayed until closer to the end of your grace period).
Repayment options for federal Perkins loans are quite different from those for direct loans or FFEL loans. Contact your school for more information on the same.
If you have more than one federal student loan, consolidating them into one single federal loan could simplify repayment. This is because instead of having to pay numerous lenders and services, you only have to deal with one payment. Look into the pros and cons of consolidation of loans before making a decision. However, these days people are coming up with a lot of creative ways to repay their student loan amount. Look more at crowdfunding on your student loans
You will have to start repaying your loans once your grace period has ended. The grace period differs from lender to lender and also the type of loan contract. Some private student loans have a short grace period which allows the borrower to defer payments until he/she is done with school.
Some private student loans require the payments to be made as soon as the funds have been disbursed. It is important to check the loan terms and conditions to check all the available specifics to when the repayment of the loan will begin.
It might seem overwhelming to manage a lot of loans so here are a few points to help manage your private loans. You will have to apply for a loan each year you are in college so you will have to time the application well. You will have enrolled in school at least half the time. As interest accrues throughout the life of the loan it is important to try and make in-school payments to lower the cost of the loan. When you graduate or leave school you will have a grace period of 6 months, so it is important to try and get your finances together during this period. While taking out loans it is important to keep track of how much you are borrowing and from whom. Always remember to borrow responsibly.
True to what the term sounds like, “Grace Period” is a certain period allowed by the government before you are officially required to start making payments. Most federal student loan types permit a 6 month grace period after you graduate, leave school or drop below half-time enrollment. Perkins loans sometimes permit up to 9 months of grace periods.
This period gives you the time to financially stabilize and select a convenient repayment plan. Not all federal student loans have a grace period. For most loans, interest accumulates during your grace period. You may pay the interest that accrues during your grace period. This prevents that interest from being added to the principal balance (this is called interest capitalization).
