Repayment starts after a grace period, not immediately after you leave school

Most federal student loans enter a grace period after you graduate, leave school, or drop below half-time enrollment. During this time, you do not have to make payments. The length of the grace period depends on the loan type: Direct Subsidized and Unsubsidized Loans have a six-month grace period, while Direct PLUS Loans have no grace period at all and begin accruing interest immediately.

Your first payment is due the month after your grace period ends. For a Subsidized or Unsubsidized Loan, that means your first bill arrives roughly seven months after you leave school. Private student loans work differently — they may have no grace period, or the lender sets their own timeline, so you need to contact your lender directly to learn when payments begin.

The federal government does not send you a bill. Instead, your loan servicer — the company that collects your payments — will contact you by mail and email with your payment amount and due date. If you do not hear from them within a few weeks of your grace period ending, contact your servicer directly using the name on your loan documents or by logging into studentaid.gov.

Key Takeaways

  • Federal Subsidized and Unsubsidized Loans have a six-month grace period after you leave school; your first payment is due in month seven.
  • Direct PLUS Loans have no grace period and begin accruing interest the day they are disbursed.
  • Your loan servicer will contact you with your payment amount and due date; you do not receive a bill from the federal government.
  • Private loans follow the lender's own timeline, which may be shorter or have different terms than federal loans.
  • If you are still in school or enrolled at least half-time, your loans remain in deferment and payments do not begin.

What happens during the grace period

The grace period is a window where you are not required to pay, but interest still accrues on unsubsidized loans. On a Subsidized Loan, the federal government pays the interest that builds up during the grace period, so you do not owe it. On an Unsubsidized Loan, interest accrues and gets added to your loan balance — a process called capitalization. This means your first payment will be higher because you now owe the original loan amount plus the interest that accumulated.

The grace period is also when you should set up your repayment plan. The standard plan is automatic, but you can choose income-driven repayment, which bases your payment on what you earn. Changing your plan before payments start can lower your monthly bill significantly. You make this choice through your loan servicer's website or by calling them directly.

How to find your loan servicer and payment due date

Your loan servicer's name and contact information appear on any loan documents you received in school. You can also find it by logging into studentaid.gov with your FSA ID, selecting "My Aid," and looking at your loan details. Each loan may have a different servicer, so check all of them.

Once you know your servicer, contact them to confirm your grace period end date and your first payment due date. They can also tell you your current loan balance, interest rate, and what repayment plan you are on. If you have not heard from your servicer within 30 days of your grace period ending, reach out to them — do not wait for a bill to arrive.

Deferment and forbearance: pausing payments after they start

If you cannot pay when your grace period ends, you may be able to pause payments through deferment or forbearance. Deferment stops payments and interest accrual on Subsidized Loans, but interest still accrues on Unsubsidized Loans. Forbearance pauses payments on any federal loan but interest accrues on all of them.

You must request deferment or forbearance before your payment is due — it is not automatic. Common reasons include economic hardship, unemployment, or returning to school. Your loan servicer has the application and can tell you what documentation they need. These options are temporary, usually lasting six to twelve months, and you must reapply when they expire.

Income-driven repayment and lower monthly payments

If your income is low or you have a large loan balance, an income-driven repayment plan can reduce your monthly payment to as little as $0. These plans base your payment on your discretionary income — roughly your gross income minus 150 percent of the federal poverty line for your family size. After 20 or 25 years of payments (depending on the plan), any remaining balance is forgiven.

You can switch to an income-driven plan at any time, even after payments have started. You will need to provide recent tax information or income documentation when you enroll. Your payment recalculates each year based on your current income, so if your earnings change, your bill changes too. Income-driven plans are particularly useful if you are starting a new job, returning to school part-time, or facing a temporary income drop.

What happens if you miss a payment

If your payment is due and you do not pay, your loan enters delinquency after one day. Your servicer will contact you by phone and mail. After 90 days of missed payments, the delinquency is reported to credit bureaus and damages your credit score. After 270 days (nine months), your loan goes into default, and the federal government can take action to recover the debt, including wage garnishment and tax refund offset.

If you know you cannot pay, contact your servicer before the due date. They can discuss deferment, forbearance, or a temporary payment reduction. These options stop the clock on delinquency and prevent default. Waiting until after you miss a payment makes the process harder and the damage to your credit score worse.

Frequently Asked Questions

Do I have to start paying back my loans while I am still in school?

No. As long as you are enrolled at least half-time, your federal loans remain in deferment and payments do not begin. Once you graduate or drop below half-time enrollment, the grace period clock starts. If you are taking a semester off or switching schools, notify your servicer so they know your enrollment status.

What if I have both federal and private student loans?

Federal and private loans have separate timelines. Federal loans follow the grace period rules described here. Private loans are set by each lender — some have grace periods, others do not. Contact your private lender directly to learn when your first payment is due. You may be paying one lender while still in grace with another.

Can I make payments during the grace period?

Yes. Paying during the grace period reduces the amount of interest that accrues on Unsubsidized Loans and lowers your first payment after the grace period ends. You can make voluntary payments through your servicer's website or by phone. There is no penalty for paying early or paying more than the minimum.

What if I consolidated my loans or took out a new loan after graduation?

Consolidation creates a new loan with its own grace period. If you consolidate after your original grace period has ended, the new consolidated loan gets a fresh six-month grace period. New loans taken out after you leave school (such as Parent PLUS Loans) have their own timelines. Each loan or consolidation is treated separately by your servicer.

How do I know if my loan is in default?

Your servicer will notify you by mail and phone if your loan enters default after 270 days of non-payment. You can also check your loan status on studentaid.gov or by calling the Federal Student Aid Information Center at 1-800-4-FED-AID. If you believe your loan is in default, contact your servicer immediately to discuss rehabilitation or consolidation options.