One perk of having a federal student loan instead of a private student loan is that you are not required to start making payments right away. In fact, many federal student loans have a grace period*, or a set amount of time after you graduate, leave school, or drop below half-time enrollment before you must begin repaying your student loans. For most student loans, the grace period is 6 months but in some instances, the grace period could be longer. The grace period gives you time to get financially settled and to select your repayment plan.
For those of you who are getting ready to graduate, your grace period is about to begin. You’ll be contacted by your loan servicer, a company that works on behalf of the U.S. Department of Education to process and manage student loan payments, letting you know how the repayment process will work.
In the meantime, here are four things you should do now, before your first student loan payment is due:
1. Get Organized
Start by tracking down all of your student loans. Did you know that there is a website that allows you to view all your federal student loans in one place?
Note: Don’t forget to check your personal records to see if you have private student loans.
2. Contact Your Loan Servicer
Your loan servicer is the company that will be collecting payments on your federal student loan on behalf of the U.S. Department of Education. They are also there to provide support. Your loan servicer can help you choose a repayment plan, understand loan consolidation, and complete other tasks related to your federal student loan, so it’s important to maintain contact with your loan servicer. If your circumstances change at any time during your repayment period, your loan servicer will be able to help.
To find out who your loan servicer is, visit www.nslds.ed.gov. You may have more than one loan servicer, so it is important that you look at each loan individually.
3. Estimate Your Monthly Payments Under Different Repayment Plans
Federal Student Aid has a great Repayment Estimator tool that allows you to compare our different repayment plan options side by side. Once you log in, the repayment estimator pulls in information about your federal student loans, such as your loan balance and your interest rates, and allows you to estimate what your monthly payment would be under each of our different repayment plans. It also allows you to compare the total amount you will pay for your loan over time depending on the repayment option you choose. Try it!
4. Select the Repayment Plan That Works for You
One of the greatest benefits of federal student loans is the flexible repayment options. Take advantage of them! Although you may select or be assigned a repayment plan when you first begin repaying your student loan, you can change repayment plans at any time. There are options to tie your monthly payments to your income and even ways you can have your loans forgiven if you are a teacher or employed in certain public service jobs. Once you have determined which repayment plan is right for you, you must contact your loan servicer to officially change your repayment plan.
* Not all federal student loans have a grace period. Note that for many loans, interest will accrue during your grace period.
Nicole Callahan is a digital engagement analyst at the Department of Education’s office of Federal Student Aid.