Grace Period

When you leave school, or drop below half-time status, the student loans you have borrowed will enter a grace period.  This is a period of time where no payments are required.

There are no pre-payment penalties on any of the Federal Loans. This means borrowers may begin early if they choose and pay the loan in full early with no penalties. 

Interest does not accrue on most loans during school or the grace period.

The Unsubsidized Stafford Loan and PLUS Loan are the exception to this, and interest does accrue during this time. 

Making payments during a grace period is a good way to reduce the overall loan balance since payments are applied directly toward the principal balance for any subsidized loans (Subsidized Stafford, Perkins)

Loan Type

Grace Period (Length of time before repayment begins)

Federal Stafford (Subsidized and Unsubsidized) Loans

6 months

Federal Parent 
PLUS Loans

No automatic grace period.* 

Federal Graduate
PLUS Loans

6 months

College Access Loans

6 months

Texas B-On-Time Loan

6 months

*The Plus loan application offers the parent a choice of beginning payments immediately or deferring them.