Grace Period

Many student loans provide a "grace period" immediately following graduation. This is a time when payments are not required and, in some 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 graduate school studies (for research, illness, etc.), your loans were placed in grace at that time. Whether or not you receive a grace period upon graduation depends on the length of time you were away from undergraduate or graduate 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.

Type of Loan Grace Period Interest accrues during grace
Federal Direct or FFEL Subsidized Loans prior to 7/1/2012 6 months


Federal Direct or FFEL Subsidized Loans after to 7/1/2012 6 months Yes
Federal Direct or FFEL Unsubsidized Loans 6 months Yes
Federal Direct Graduate PLUS Loans None* Yes
Consolidated Loans None Yes
Federal Perkins Loans 9 months No
UCSF University Loans 6 months No
Health Professions Loans 12 months No
Loan for Disadvantaged Students 12 months No
Nursing Student Loans 9 months No
Primary Care Loans 12 months No

*There is no grace period for Direct Graduate Plus Loans. However, you are eligible for an automatic six-month post-enrollment deferment after you cease to be enrolled at least half-time. Interest will continue to accrue during this six-month deferment similarly to interest accruing during the grace period for a Direct Unsubsidized Loan.

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.

Making Payments During Grace Period

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.

Link to Making Payments During Deferment or Grace