Student Loan Repayment: When Do You Have to Start Paying Back Your Loans?

By Jon O'Donnell Updated on January 26, 2022

After graduation, you're thinking about a lot of things — your career, where you want to live, and most importantly, when you're going to pay back your student loans. One of the first things you should do after graduating is figure out an ideal repayment plan for your student loans.

Creating an ideal student loan repayment plan will help you have a better understanding of your personal finances and help you budget after graduation. 

When do my student loan payments start?

The first step to repaying your student loan payments is figuring out when you start repaying them. From there, you can start evaluating your current financial situation and weighing it against which repayment plan will be the most affordable and allow you to pay off your student loans fastest.

Your repayment period can start at different times, depending on what type of loans you have and your lender. While most loan servicers offer a six-month grace period after you drop below half-time enrollment or graduate, it can differ from lender to lender. According to the U.S. Department of Education, federal student loan borrowers start repaying their loans six months after you graduate or drop below half-time enrollment. 

Private student loans sometimes will have a six-month grace period, but some lenders require you to make monthly payments as soon as the funds are dispersed.

However, if you need more time to start paying back your loans, you don't have to follow the standard repayment plan. There are alternative payment plans that could be better suited for you after graduation.

Alternative student loan repayment options

If you're worried about repaying your student loans when your grace period ends, there are a few alternatives you can explore. While some of these options only apply to your federal student loan payments, you may be able to apply some to your private loans as well. Some of these alternatives include: 

  • Student loan deferment

  • Student loan forbearance

  • Student loan forgiveness

  • Student loan refinancing 

Each program has different eligibility requirements which can be determined by the length of your loan, your employment, the type of loan you have, and more.

Deferment

Student loan deferment is one of the most common ways that you can extend your student loan payments. Usually, the deferment period will last anywhere between six months to three years. If your loans are federally subsidized, they won't accrue interest through your deferment period. However, if you have private or unsubsidized loans, your student loan debt will continue to accrue interest throughout the deferment period. 

To qualify for loan deferment, you should apply through your loan servicer. However, deferment is only a short-term solution for your student loan debt. If you foresee having trouble repaying back your loan balance for more than three years, you should sign up for an income-based repayment plan. 

Forbearance

Student loan forbearance is another short-term solution you can look into after graduation if you are experiencing financial distress. The forbearance period usually only lasts up to 12 months and allows you to make either no payments or small payments on your loan balance.

Forbearance works the same way for all types of federal and private loans. You'll have to go through an application process with your loan servicer to determine if you're eligible. Additionally, your loans will continue to accrue interest throughout the forbearance period. 

During the Coronavirus pandemic, the federal government offered an extended student loan payment pause on all federal loans. During this period, your federal loans would be in forbearance, but would not accrue interest over time. As of right now, the federal student loan forbearance period is scheduled to end in May 2022. 

Forgiveness

The ideal alternative payment program for most people is student loan forgiveness. Student loan forgiveness programs can help reduce your total loan amount. However, student loan forgiveness programs have much stricter eligibility requirements compared to both forbearance and deferment. Additionally, only federal student aid is eligible for student loan forgiveness.

Some of the most common forgiveness programs are the Public Service Loan Forgiveness program, Perkins Loan Cancellation and Discharge, and the Teacher Loan Forgiveness program. These are all offered by the federal student loan servicing companies but tend to have strict qualifications. 

If you qualify for one of the student loan forgiveness programs, it's definitely worth applying to reduce your student debt.

Refinancing

While student loan refinancing won't allow you to stop making monthly loan payments, it can make your monthly payment more manageable. With student loan refinancing and consolidation, you can combine all of your loans into one monthly payment. Often, especially if you have a good credit score, you can even get a lower interest rate or monthly payment on your loans. 

You can refinance your student loans with a private lender to help save you money over time. Plus, there are no eligibility requirements to refinance your loans. However, you will be subject to a credit check before finalizing your new rates. 

Frequently Asked Questions

What are student loan grace periods?

The term “student loan grace period” refers to the amount of time between when you finish borrowing loans and when you have to pay them back. For most federal student loans, the grace period is six months after entering repayment. Repayment generally begins after graduation, but it also can kick in after six months of being less than a half-time student. It’s  important that you check with your loan servicer as to the exact date your loan payments are first due. For private loans, there isn’t a standardized rule as to when repayment begins. Be sure to call your lender to find out when repayment starts.

What is a student loan repayment schedule?

A student loan repayment schedule is the time frame for paying off your student loan: the date you’ll pay your installment each month, the amount you’ll pay each month, and for how many years. For instance, if you pick the standard 10-year repayment plan option, you’re on a schedule to make a payment every month for 10 years. The day your payment is due each month may not be the same date someone else’s is due. Always ask your loan servicer what date your payment is due to be sure you’re able to pay it on-time each month.

How much do I pay each month?

How much you pay each month will depend on the type of loan you received, how much money you borrowed, the interest rate on your loan, and the repayment plan you choose  like an IBR or ICR plan.  Your payment may range from $0/month and up. The best way to find out your payment amount is to call your servicer and ask for your repayment plan options.

Should I pay more than my required monthly payment?

The answer to this question depends on whether or not you're on an income-driven repayment plan. These plans can offer some loan forgiveness after 10 years or more of payments. In this case, extra payments will only reduce the amount that can be forgiven. If you want to ensure your loan is paid off faster and you don’t qualify for income-driven repayment plan, tell your loan servicer that the extra you pay is not intended to be put toward future payments, but rather that it should be applied to the principal of your loan.

What happens if your student loans fall into default?

When your student loans fall into default, you can expect it to have a big impact on your credit report. Additionally, this can make it hard for you to get new lines of credit in the future for things like mortgages, credit cards, personal loans, and more.

How do I get a discount on my monthly student loan payment?

Some private lenders will offer various discounts on your monthly student loan payments. The most common among student loan lenders is an autopay discount. If you sign up for autopay on your monthly student loan payment, your servicer may offer you a discount.

Learn more about student loan repayment with Nitro

Student loan debt can be really overwhelming — especially right after you graduate. Nitro is aiming to make understanding the college process, from applications to life after graduation, easy and accessible. 

Learn more about your online education options, student loan repayment plans, and more with Nitro.

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Published in: Private Student Loans

About the Author
Jon O'Donnell

Jon is a writer and marketer for Nitro who is passionate about bringing transparency to the student loan process along with providing families with the information needed to make smart financial decisions. He also just recently refinanced his student loans allowing him to pay them off 5 years faster all while saving an additional $152/month. As he continues to pay them off himself, he strives to help others do the same. Jon also has a long history of connecting people with educational opportunities to help them improve their careers and their overall personal finances. In his free time you can find him reading travel blogs and researching destinations around the world in search of his next adventure. Read more by Jon O'Donnell