Understanding Student Loan Grace Periods

by DeLadurantey Law Office, LLC on June 12, 2014

grace periodMany graduates have heard that they have a “grace period” before their obligation to repay their student loan begins. However, there are many misunderstandings of how grace periods work. Below are a few tips to give you general guidance regarding student loan grace periods:

  • Federal loans. Most federal student loans have a grace period of at least six months, but it may be longer, depending on the type of loan. This time is meant for borrowers to get themselves established financially before they must begin making their student loan payments.
  • Multiple grace periods. Depending on the type of loan you obtained, you may be able to get more than one grace period. For example, you may be eligible for a grace period anytime you drop below half-time status in school. It is important to do your research regarding what your lender considers half-time and how the grace periods work before altering your status.
  • Interest accrual. Your loan may accrue interest during a grace period, but it may not. It is important to understand your individual loan and how the interest will be treated before taking advantage of a grace period. Additionally, if your loan accrues interest during the grace period, the interest will capitalize, which means that it will be added to your principal amount of the loan when the your grace period is over. Thus, any payments you can make during your grace period will decrease that amount.
  • Other options. If you have already had a grace period but you need additional help, federal student loans have numerous repayment options that can make your loan more manageable.

To learn more about student loans and grace periods, call us today to schedule an appointment.

If you would like a down-to-earth approach and a lawyer who will listen carefully to all your questions and concern, call DeLadurantey Law Office, LLC,at (414) 377-0518. We serve clients primarily in the areas of student loan law, Chapter 7 and Chapter 13 bankruptcies, debt negotiations and defending foreclosure actions. If you live in the area of Milwaukee, Wisconsin, call us for the debt relief assistance you need. Visit our web site and like us on Facebook.


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