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Intriguing Updates Regarding Grad PLUS Grace Periods

June 5, 2012 | Adam S. Minsky, Esq. Policy & Reform

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A couple of weeks ago, I blogged about federal student loan servicing problems with Grad PLUS loans. Specifically,some graduating students are being told there is a Grad PLUS grace period, when there is no such thing.

Well, it turns out that Grad PLUS loans *do* in fact have some sort of grace period. Starting with loans disbursed in 2008, Grad PLUS borrowers are entitled to a six-month deferment period after graduation (see this Department of Education overview). This is effectively a grace period, even if it is not called one. It turns out I was wrong; this IS the result of a well-intentioned policy change! Who woulda thunk?

That said, there are still serious problems. This deferment period is being unevenly applied– and that’s an understatement. In fact, my unscientific assessment is that at least half of graduating grad students are being affirmatively told that they have NO such deferment period for their Grad PLUS loans and they must place them in forbearance to avoid getting billed the first month following graduation (I myself graduated law school in 2010, with Grad PLUS loans only disbursed in 2009 and 2010, but I was told there was no grace or deferment period). Some students are having success by informing ill-informed customer service representatives that they are, in fact, entitled to a deferment period, but even this a mixed bag. Let this post be part correction, and part friendly notification: graduating students with Grad PLUS loans disbursed after July 2008 are in fact entitled to a 6-month post-graduation deferment period. Whether you will get it, however, is another matter.

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Policy & Reform

About Adam S. Minsky, Esq.

Adam S. Minsky founded the first law office in Massachusetts devoted entirely to assisting student loan borrowers, and he is one of the only attorneys in the country practicing in this area of law. He provides counsel, legal assistance, and direct advocacy for borrowers on a variety of student loan-related matters. He regularly speaks to students, graduates, and advocates about the latest developments in higher education financing.

Books by Adam S. Minsky

The Student Loan Handbook for Law Students and Attorneys

The Student Loan Handbook for Law Students and Attorneys

Student Loan Debt 101

Student Loan Debt 101: The Definitive Guide to Understanding and Managing Your Student Loans

Student Loans for Parents and Cosigners

The Student Loan Guide for Parents and Cosigners

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asminsky@minsky-law.com
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Boston, MA 02110

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