Student Loans After Graduation
The first obligation may be the repayment of student loans. After graduating from college, there is usually what is called a "grace period" before the first payment is due. This period is typically six to nine months depending on the type of loan.
Grace periods begin after graduation, when a student withdraws from college or if a student has less than half-time status.
Depending upon the type of loan a student has, repayment will vary. There are private and federal loans.
For Private Loans:
- Grace period is usually six months, but check with lender
- Interest rates are often variable-rate loans, meaning the interest rate can change
- Additional fees, such as a repayment fee, may apply and are determined by how creditworthy the applicant is
- Prepayment penalties (if the loan is fully repaid early) are not assessed
- ForbearanceForbearance: postpone or reduce payment while continuing to pay interest and defermentDeferment: loan payments are postponed and interest may or may not need to be paid benefits may be allowed if the borrower experiences difficulties repaying the loan, but this is not automatic
For Federal Loans:
- Stafford Loans - grace period is six months
- Perkins Loan - grace period is nine months
- Interest rates are fixed
- Default and origination fees are included
- There is never a prepayment penalty if the loan is repaid early
- Forbearance and deferment benefits may be allowed if the borrower experiences difficulties repaying the loan, but this is not automatic