What is a Grace Period?
A grace period is a set amount of time after you graduate, leave school, or drop below half-time enrollment during which you are not required to make loan payments.
This period is designed to help you become financially settled and choose a repayment plan before your first bill is due. During a standard grace period:
- No interest accrues (on subsidized loans).
- No late fees are charged.
- You may still make pre-payments without penalty to reduce your future balance.
Grace Period Lengths by Loan Type
The length of your grace period varies depending on the type of loan you borrowed:
Federal Direct Loans
- Subsidized & Unsubsidized Loans: 6-month grace period.
- Graduate/Professional PLUS Loans: 6-month grace period after graduating or leaving school.
- Parent PLUS Loans: No grace period (repayment usually begins once the loan is fully disbursed).
Campus-Based and University Loans
- California Dream Loan: 6-month grace period.
- Federal Perkins Loan: 9-month grace period.
- University/Quon Loans: 9-month grace period.
Circumstances That Affect Your Grace Period
Certain life events or financial decisions can reset or cancel your grace period:
- Active Military Duty: If you are called to active duty for more than 30 days before your grace period ends, you will receive a full new grace period (typically six months) when you return from service.
- Returning to School: If you re-enroll at least half-time before your grace period expires, you will receive your full grace period again when you graduate or drop below half-time status.
- Loan Consolidation: If you consolidate your loans during a grace period, you will lose the remaining time and must begin repayment immediately once the consolidation is processed.
- Note: You may request that the processing of your consolidation be delayed until your grace period is nearly over.