Post-Graduation Grace Period

Most students are not fortunate enough to say that they will be jumping straight into a job after graduation. Some will go onto graduate school, and others will wade into the working world. Whichever path is taken, students are usually not rolling in money during the immediate months after graduation. For some, it is a nearly impossible feat to start paying back student loans right after graduation. For this reason, almost all student loans offer a period of months in which repayment is postponed.

This grace period, as it is referred to by lenders, varies depending on the type of loan a student takes out. Some offer a three month grace period, while others allow students to take up to nine months before they are expected to make regular repayment installments. Government loans, such as the Stafford and Perkins loans, allow 6 month and 9 month grace periods, respectively. Some lenders do offer extensions on a grace period because of financial hardship, but these are granted on a case-by-case basis.

The grace period also differs in the way student loan interest is paid. Some lenders add the interest to the amount owed during the grace period, while other types of loans pay the interest during these months.