What You Should Do During Your Student Loan Grace Period

If you took out student loans during your college career and graduate or leave school early, you usually have a student loan grace period afterward. This period tends to be six months long, but some can be longer. Here are some things you should be doing during that window.

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Gather Your Information

Over the last four years, or however long you attended college, you may have misplaced your student loan paperwork. It’s important to gather them all together, especially if you’ve taken out more than one loan.

For federal loans, you can find all your information online, but you will need to know the pin you created when you applied. Also, gather all the paperwork for any of your private loans. If you can’t find it, make sure to contact the bank or credit union that supplied the loan.

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Postpone If Possible

In some cases, even with the grace period, it may be possible to extend the time you’re granted. If you dropped out of school or had to take a break, return to college before the grace period ends and you can reset the timer. You’ll then have another grace period after you graduate or leave again later. However, you do have to have at least half-time during your attendance.

Active military duty will also postpone your grace period. The clock will reset after you leave.

Select a Repayment Plan During Your Loan Grace Period

Most students select a repayment plan when they accept the loan, but you can change your plan later on if you find that another is better suited to your needs. Federal loans have excellent repayment plan options, fit for any situation. You may also be able to use an income payment scale, where your payment increases or decreases depending on your income.

If you don’t like the repayment plan you selected at the beginning of your loan, make sure to contact a loan servicer, the bank, or the credit union that granted you the loan to see what changes can be made.

Consolidate, Refinance, or Increase the Payment

During the grace period, you may also want to consider consolidating, refinancing or increasing the monthly payment. Consolidating allows you to have all your loans in one place, with one contact and one payment. This is an especially good idea if you have several loans and are having trouble keeping track of them all.

If your interest rate is too high, you might want to look into refinancing your loans to lower your payments. You may not be able to use this route immediately unless you qualify for the new loan.

Another option available to you is increasing the monthly payments right away. If you secure a job directly out of college, this might be a route to take as you will pay the loan off faster and have less interest accumulating over time, saving you money.

Although you don’t have to worry about repaying your loan during the first six months after you leave college, there are things you should be doing to prepare yourself for when they do come due. Getting your paperwork together in one place is just the beginning.

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*APR includes a 0.25% interest rate reduction for enrollment in automatic payments.

**Interest rate reduction of .25% for automatically withdrawn payments from any designated bank account (“auto debit discount”). Auto debit discount applies when full payments (including both principal and interest) are automatically drafted from a bank account. The auto debit discount will continue to apply during periods of approved forbearance or deferment if the auto debit discount was in effect at the time of receiving the forbearance or deferment. Auto debit discount will remain on the account unless (1) the automatic deduction of payments is canceled or (2) there are three consecutive automatic deductions returned for insufficient funds at any time during the term of the loan.

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