Graduating? Got loans? Here’s how to use your 6-month grace period wisely

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Submitted by the Office of Financial Aid


If you are graduating in May, you likely have a lot on your mind right now.  But if you have student loans, take the time to make just a few more important decisions over the next couple of months.


The good news:  you will have a six-month grace period after you graduate before you need to begin making payments on your federal loans.  If you have any private alternative loans, contact your private lender for details.


Step 1 — Gather the facts on your federal student loans from NSLDS.ED.GOV


    • What types of loans do I have? Subsidized, unsubsidized, or both?
    • What is the TOTAL amount I owe?  Use this information to estimate your monthly payments and choose the best repayment plan.
    • Does one of my loans have a higher interest rate than another?  If you have more than one loan to repay, and the interest rates are different, paying off your higher interest loan first can save you money in the long run.


  • Who is my loan servicer, and how do I get in touch?  It is your loan servicer’s job to answer your questions about repayment—don’t be afraid to reach out for help.  If you have taken out multiple loans, you may even have multiple loan servicers.  Contact info for your federal student loan servicer(s) is also on NSLDS.ED.GOV.



Step 2 — Learn about your repayment options from STUDENTLOANS.GOV


If you do not choose a repayment plan during your 6-month grace period, your loan servicer will automatically put you on the Standard Repayment Plan.  Research your choices, though, and you may find and pick a repayment plan that would be a better fit.   Here are some terms to get you started:


  • Standard Repayment Plan:  Generally, this means making larger monthly payments.   This reduces the amount of interest to pay and helps you pay off your loans more quickly.
  • Graduated Repayment Plan: Monthly payments that gradually increase over time.  This could be a good plan to choose if you anticipate a lower income immediately after graduation, but increased income in later years.
  • Income-Based Repayment Plans:  Bare minimum monthly payments.  If you anticipate a low income, this may be a good plan to choose, but it may take you longer to repay your loans. With the additional interest, you will end up paying more in the long run.  Income-Based Repayment Plans often require extra documents, so start your paperwork early.
  • Loan Consolidation:  If you have multiple loans, you have the option to consolidate them into a single loan, with a single payment process and loan servicer.   Discuss this with your loan servicer to help you decide whether this option is right for you.


Use the online repayment calculator to read about your options and estimate your payments:


What if I can’t begin repayment in 6 months? Deferment and Forbearance are formal ways for you to postpone your loan payments.  Contact your loan servicer for more information about these options, and how to apply for the one that may fit your circumstances.


Keep in mind that deferment and forbearance are not available if your loans go into default.  It is important to be proactive, and contact your loan servicer if you are unable to make payments.  


What if I am going to graduate school before my 6-month grace period ends?  If you are starting in a graduate program right away, you may not have to start making payments on your loans just yet.  Be sure to contact your loan servicer for more information.


Step 3 — Get organized


Use an online or paper calendar to mark:


  • The date you will enter repayment
  • The dates your loan payments are due, and the amounts due


Make a plan and stick to it so your loans can help you build good credit.  The advantages of good credit are far reaching, from helping you receive lower insurance rates to helping you buy a home.  Conversely, bad credit can prevent you from getting approval for a car loan, and hinder both employment and admission to grad school.


STUDENTAID.ED.GOV is another great source for tips on student loan repayment, especially if you’re just beginning to think about it.  And of course, if you have questions about your loans, you’re always welcome to contact the NCF Financial Aid staff at


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