If you have Federal student loans, you probably have six months before you have to start making payments. Here's how to use that time wisely.

I’m not sure if you know this, but you don’t have to start repaying your Federal student loan debt as soon as you graduate from school.

You actually have a “grace period” in between graduating from school and starting repayment, which is pretty awesome. Here’s everything you need to know about grace periods.

What is a grace period?

Your student loan grace period is the amount of time between:

  • graduation
  • dropping below half-time, or
  • withdrawing from school


  • when you’re required to start repaying your student loans.

Your grace period gives you time to get a job after you graduate and financially prepare to repay your loans.

Does your loan have a grace period?

Not all student loans have grace periods.

  • Federal Stafford loans have a six-month grace period
  • Federal Perkins loans have nine-month grace periods and may be eligible for another six-month grace period after an eligible deferment.
  • Direct PLUS loans do not have a grace period. However, you might qualify for deferment (generally, if you’re a graduate student, you can defer your PLUS loans while you’re in school and for six months after graduation or dropping below half-time enrollment).

If you have private loans, you need to look at the specific terms of the loans to determine whether you have a grace period.

To be sure about the specific terms of your grace period, call your loan servicer and ask when your first payment is due.

Will interest accrue during my grace period?

It depends.

Interest will not accrue during the grace period on federal Perkins loans and subsidized Stafford loans made before July 1, 2012 or after July 1, 2014. Interest accrues during the grace periods on most other loans, including unsubsidized Stafford loans.

If interest does accrue during your grace period, you may consider beginning your student loan payments before they are required. The longer you defer payments, the more interest you’l pay.

How to take advantage of your grace period

1. Get a job

The best way to use your grace period is to find a good job that will help you make those upcoming monthly payments.

2. Make a repayment plan

You can also use this time to make a plan for paying off your debt.

Read our guide for the best way to pay off student debt here: What’s the smartest way to repay your student loans?

3. Start paying off your loans anyway (optional)

Interest on your student loans will likely accrue during your grace period, so you could start repaying them right away and save yourself money in the long run.

4. Start an emergency fund

If you’re already employed, set aside a little money each week into an account to deal with unexpected events. It will be a lot harder to do this later when you have to make your monthly payments.

5. Get your life on track

The grace period is there to help you prepare for loan repayment. Use it to set up your life and start off on a good career path. You’ve invested in yourself by going to school, now make the most of that education and get a head start on your future before the loans demand your attention.


If you have Federal student loans that qualify for a grace period, then you will likely have six months between finishing school and when your first student loan payment is due.

This means that you have six months to accomplish other financial priorities, like getting a good job and making a plan for the future. Whatever you do, be sure to take advantage of your grace period—don’t waste it.

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About the author

Total Articles: 17
Natalie Bacon is the blogger behind Financegirl, where she writes about finance and intentional living for young professional women. Natalie is a former corporate attorney who traded in her job to pursue a career in financial planning, freelance writing, and blogging.

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1 comment
Money Beagle says:

Whatever you do, the most important thing is to make that payment part of your budget for at least a few months before the payment kicks in. Whether you make an actual (early) payment on the loan, or put the money into savings, if you have the money directed away from your available spending amounts before the payments kick in, you’ll be in smooth shape on day one.