Repayment after you leave school

The months after you leave

Most subsidized and unsubsidized loans have a six-month grace period that begins when you graduate, leave school or drop below half-time. Payments are on hold during it, though interest keeps building on unsubsidized loans. Parent PLUS loans follow different timing, so a parent borrower should ask their servicer when payments start.

Your school will ask you to complete exit counseling on studentaid.gov before you go. It shows your total balance, your servicers and estimated payments under different plans, which makes it a useful place to start planning.

Finding your servicer and your balance

Your loan servicer is the company that collects payments and answers questions for the Department of Education. Sign in to studentaid.gov to see every federal loan you hold and the servicer handling each one. Then open an online account with each servicer, so statements and notices reach you.

Keep your address, email and phone number current with studentaid.gov and with every servicer. If a notice goes to an old address, you can fall behind on payments without realizing it.

Kinds of repayment plan

Federal loans offer a standard plan with fixed monthly payments over a set number of years, and income-driven plans that base the payment on your income and family size. Congress and the Department of Education have changed plan names and terms several times in recent years, so check studentaid.gov for the plans open to you now.

A lower monthly payment usually means a longer repayment period and more interest over time. The Loan Simulator on studentaid.gov compares plans using your own balances, and your servicer can move you to a different plan if your situation changes.

If payments become hard

Call your servicer as soon as a payment looks out of reach, before you miss it. Options can include an income-driven plan, deferment while you are back in school or out of work, and forbearance for a short period. Each one treats interest differently, so ask how your balance will change.

A federal loan left unpaid for many months can go into default, which can damage your credit, add collection costs and lead to money being taken from tax refunds or wages. For a private loan, contact the lender directly, since its rules come from your contract.