Ah, the holiday season. The weather is getting colder, lights and decorations are appearing, holiday music is everywhere, there’s hot cocoa and gingerbread and candy canes…
Oh and also, if you recently graduated, you’re probably going to get your first bill for your student loans.
Sorry to put a damper on your holiday cheer, I’m really not a Scrooge. But if you graduated this past spring, your loans have probably been in what’s called a “grace period.” This is a period of time post-graduation where you don’t have to pay your student loans. The idea is that recent graduates should be given some time to transition from college-life to the real-world, find a job, get a place to live, etc. And you shouldn’t have to worry about paying your student loans during this time.
The length of a grade period depends on the type of loan you have. Most student loans, such as federal Stafford loans, federal Graduate PLUS loans, and many private student loans, have a six-month grace period. So that means if you graduated in May or June, your student loans will be entering repayment in December or January. Some loans, such as federal Perkins loans, have longer grace periods (Perkins loans in particular have a 9 month grace period).
If you just left graduate school this spring, you have to be extra careful. Grace periods can only be used once. So if you have loans from your undergraduate degree, and you used some or all of your undergraduate student loan grace periods when you graduated from college, these older loans may become due far sooner than your graduate student loans. That’s something to watch out for.
If you’re not sure when your grace period ends, contact your student loan servicer and they should be able to tell you. If your loans are becoming due and you can’t afford the payments, consider your options. For federal student loans, you can explore Income-Based Repayment or Pay-As-You-Earn. You may also be able to postpone your payments through deferment or forbearance, but be careful, you don’t want to use deferment and forbearance for long-term management of your student loans.
