Grace Period

Many student loans provide a "grace period" immediately following graduation. This is a time when payments are not required and, in many cases, interest does not accrue. The grace period must be used before you can obtain deferments. Some loan programs provide another grace period, lasting six months, after periods of approved deferment. The Unsubsidized Federal Stafford Loan and Unsubsidized Direct Loan charge interest during the six-month allowable grace period.  See the Grace/Deferment chart below for specific grace period information for the various federal student loan programs.

If you took a leave of absence from your undergraduate education or interrupted your medical school studies (for research, illness, etc.), your loans were placed in grace at that time. Whether or not you receive another grace period upon graduation from medical school depends on the length of time you are away from undergraduate or medical school and the policies of the individual loan programs. The status of your grace period (or lack thereof) is vitally important since it usually affects when your deferment period begins and, ultimately, when actual loan repayment begins. Information on grace periods follows.

Federal Perkins Loans

Grace period is nine months.

Nursing Student Loans

Grace period is nine months.

University of California Loans

Grace period is six months.

Primary Care Loans

Grace period is 12 months.

Federal Stafford/Direct Subsidized Student Loans

Grace period is six months. Those who return to school after the grace period has ended do not receive an additional grace period.

Federal Stafford/Direct Unsubsidized Student Loans

Grace period is six months. Those who return to school after the grace period has ended do not receive an additional grace period.

Graduate Plus Loan

There is no grace period for Graduate Plus loans taken out on or before July 1, 2008.  If you have taken out a Graduate Plus loan after July 1, 2008, you are entitled to a 6 month post-enrollment deferment (which acts like a grace period). You should not have to contact your servicer to request this post-enrollment deferment, but we recommend doing so to insure your loans remain in good standing.  If you have Federal Stafford Loans in addition to a Graduate Plus loan taken out prior to July 2008, you can ask for a six-month forbearance for your Graduate Plus loan so that your Federal Stafford Loan and Graduate Plus Loan enter repayment at the same time. Interest will accrue during this period, and make certain you check with your servicer regarding their capitalization policy.

Health Professions Loan

Grace period is 12 months after you leave school for any reason.

Activated for Military Duty

Active duty for more than 30 days extends your grace period for up to three years. This essentially means your loans do not enter grace or deferment during active duty.

Grace/Deferment Chart

Important information on grace and deferments has been compiled into a simple chart.
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Making Payments During Grace

Making a loan payment during a period of grace, deferment or forbearance can greatly lower the total amount you pay over the life of your loan. For loans that do not charge interest during grace or deferment, any payments you make during this period will reduce your principal balance. When interest begins to accrue, it will be based on a smaller balance, thus reducing the total interest you have to pay.
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