Repaying Student Loans: When Do I Have to Pay and How Much?

OK, so now that we know the types of loans we are looking at let’s answer the big questions, WHEN DO I HAVE TO PAY and HOW MUCH?

Repaying Student Loans: When Do I Have to Pay and How Much?

For Federal Stafford Loans, both Unsubsidized and Subsidized, your student loans will come into repayment roughly SIX MONTHS after you drop below half-time status, leave school, or graduate.

Federal Perkins Loans  now give you NINE MONTHS after you drop below half-time status, leave school, or graduate.

Repayment for Parent Plus Loans begin roughly SIXTY DAYS after the final distribution of the loan.  Loans that were disbursed after July 1, 2008 have the option of choosing to defer payment if the student is enrolled at least half time and for an additional six months after they drop below half-time status, leave school, or graduate.

Now I know what you’re thinking, what exactly is considered half-time?  In most cases, half time is considered 6 or more course hours and full time is 12+.  There are circumstances where this is not the case, such as schools that go by Trimesters, but overall most institutions consider 6 hours half time.

It is also important to remember that with Parent Plus Loans the loan is actually in the PARENT’S name.  All too often the parent doesn’t even realize they have this loan until they are getting a call about a payment being due.  In my personal experience I have heard Financial Aid offices tell students to have their parent’s apply for a Parent Plus loan because they will be denied and the student will be offered additional Unsubsidized Stafford Loans.  In many cases that is exactly what happens, but there are times where the parent is approved and now they have a loan out in their name for their child’s education.

The other thing that is important to know is HOW MUCH you will be paying.

Student loans accrue interest on a DAILY BASIS.  Most people don’t realize this happens at all.  The only exception to this is with SUBSIDIZED Stafford Loans and Perkins Loans.  These loans DO NOT accrue interest while the student is enrolled in school at least-half time or while on any type of Deferment (we’ll cover this in another part of the series).

UNSUBSIDIZED Stafford Loans and Parent Plus Loans will accrue interest even while the student is enrolled at least half time or the loans are placed on any type of deferment.  You have the option of making payments even before the loans come out of their grace period to try to negate or decrease the interest if you desire.

You will receive statements even while in school saying “This is not a bill,” these are just showing you the interest you are accruing in case you want to make a payment on the loan.  Once your loan comes into repayment your first bill will show you the balance of your loan and let you know what your payments are going to be.  When you first enter repayment your loans are set up on a STANDARD repayment schedule so the payment you see (if made on time every month for the duration of repayment) will basically remain the same for the 10 years you are scheduled to make payments.

Like I’ve mentioned before I know this is a lot to take in and navigating student loans can be tricky.  That is why we are doing this in a series and not as a single  post so that we are able to really cover some of the major topics appropriately.

The next post will cover REPAYMENT OPTIONS.

Read our other Student Loan articles in this series!

Repaying Student Loans: Intro (Where to Start)

Repaying Student Loans: Section 1 (When do I have to pay and how much?)

Repaying Student Loans: Section 2 (Your Repayment Options)

Repaying Student Loans: Section 3 (What if I can’t make my payment?)

Repaying Student Loans: Section 4  (What if I don’t qualify for deferment?)

Repaying Student Loans: Section 5  (Can my loan be discharged?)

Repaying Student Loans: Section 6   (Loan Forgiveness Programs)

Repaying Student Loans: Section 7  (Loan Consolidations)

Repaying Student Loans: Section 8 (Questions and Answers)