Student Loan Repayment

Are you graduating from college soon? If so, congratulations! And if you borrowed student loans to help with your college expenses, you’ll start repaying them soon. To learn more about the repayment process, review the latest information on your loans under the Aid Summary section at  

One of the advantages of taking out a federal Direct Subsidized or Unsubsidized student loan is the six-month grace period. Borrowers usually aren’t required to make a payment on their loans until six months after they graduate, withdraw or drop their number of classroom hours to below halftime status. The grace period gives borrowers time to find employment and adjust their budgets accordingly.

Due to the economic impact of the COVID-19 pandemic, the Coronavirus Aid, Relief and Economic Security (CARES) Act was enacted March 20, 2020. Federal student loan payments were suspended, interest rates were reduced to 0% and collections on delinquent and defaulted loans were stopped. Payments were originally scheduled to begin Sept. 30, 2020, but since that time, there have been more extensions on the payment freeze. The U.S. Department of Education recently announced the sixth extension of the pause on eligible* student loan payments will now be in effect through at least Aug. 31, 2022.

How does all of this affect the grace period on a student loan? According to the U.S. Department of Education, “Grace periods still apply as they normally would. However, if a loan is scheduled to enter repayment before the COVID-19 emergency relief period ends, borrowers will instead automatically enter payment suspension and receive the temporary 0% interest rate.” This means a borrower whose grace period ends before Aug. 31, 2022, will not be required to make payments on their federally owned student loan(s) until the emergency measures have been lifted. Borrowers should be aware, however that interest will accrue during the grace period once the 0% interest  rate ends. The August end date is subject to change, so it may be extended to a later date.

Something else to remember: Borrowers should monitor the six-month grace period on their federal student loans. Once you’ve withdrawn from college, dropped below halftime status or graduated, the grace period goes into effect. If you go back to school after your grace period ends on your loan, it will not be eligible for a second grace period upon graduation from a  subsequent program. Also, when the original grace period has expired, it will not be renewed when you borrow again at the new school. It’s important that borrowers talk to the financial aid office at their college to ask about the repayment start dates on each of their loans.

Typically, a grace period attaches to each federal loan you take out. borrower to know that interest will accrue during the grace period once the 0% interest ends. When you drop below halftime enrollment, the waiting period on your loan starts to run and as a consequence, you start using up your grace period. As long as you do not use up all of your grace period before you return to school, then when you graduate, the grace period clock resets and your full six-month grace period begins again.

More information about successful loan repayment can be found at

Keep up with current information on the student loan payment pause by visiting

*To see if your student loans are eligible for this program, see ‘COVID-19 Loan Payment Pause’ at