When Do You Have to Start Repaying Your Stafford Loans?

Stafford loans are a common form of federal student aid provided by the U.S. Department of Education, offering flexible repayment options. Understanding when and how to begin repaying these loans is a fundamental step for borrowers. This article clarifies the typical timeline for Stafford loan repayment and explores available options for managing these obligations.

Your Repayment Start Date

Repayment for Stafford loans generally begins after a six-month grace period. This period starts following a borrower’s departure from school or a reduction in enrollment to less than half-time status.

The grace period is triggered by specific events, including graduating, withdrawing, or dropping below half-time enrollment. Your loan servicer will provide a repayment schedule and bill before your first payment is due. Maintaining accurate contact information with your loan servicer ensures you receive these important notifications.

Postponing Repayment

Borrowers may need to temporarily pause or reduce loan payments, even after the grace period. Federal student loan programs offer deferment and forbearance. Both options allow a temporary suspension of payments, but they differ significantly in how interest accrues.

Deferment allows a temporary postponement of payments, and for certain subsidized loans, interest does not accrue. Common reasons for deferment include being enrolled in school at least half-time, unemployment, economic hardship, military service, or cancer treatment. To apply, borrowers contact their loan servicer and provide supporting documentation.

Forbearance also permits a temporary suspension of payments, but interest continues to accrue on all loan types. This accrued interest, if not paid, will be added to your principal balance, increasing the total amount owed. Forbearance is often granted for financial difficulties, medical expenses, or other personal hardships, and may be granted for up to 12 months at a time, with a cumulative limit of three years. While deferment is generally preferable due to interest not accruing on subsidized loans, forbearance can be a viable option if deferment eligibility is not met.

Choosing Your Repayment Plan

Once repayment begins, borrowers have several federal repayment plans. The chosen plan dictates the structure and duration of payments. If a borrower does not select a plan, the loan servicer typically places the loan on the Standard Repayment Plan.

The Standard Repayment Plan features fixed monthly payments over a 10-year term. While this plan usually results in the lowest total interest paid, monthly payments can be higher. The Graduated Repayment Plan starts lower and gradually increases, typically every two years, over a 10-year term. This plan suits borrowers who expect their income to rise, though it may lead to paying more interest overall.

For borrowers with higher loan balances, the Extended Repayment Plan offers a longer repayment term of up to 25 years. Payments under this plan can be fixed or graduated, resulting in lower monthly payments but a higher total interest cost. Income-Driven Repayment (IDR) plans adjust monthly payments based on a borrower’s income and family size. These plans make payments more affordable during lower income periods and may offer loan forgiveness of any remaining balance after 20 or 25 years.