- For Direct Subsidized loans:
- Repayment begins after the grace period expires. The grace period for most borrowers is six months and begins when the student leaves school or falls below half-time hours.
- For Direct Unsubsidized loans:
- Repayment of interest begins immediately, unless the student has chosen to have interest capitalized, which means interest will accrue on the loan until the student leaves school or falls below half-time hours. Repayment of principal and interest begins six months after the student leaves school or falls below half-time hours.
- PLUS Loans:
- Repayment typically begins 60 days after the loan is fully disbursed. Parents must check with their lender to obtain information on repayment procedures.
- Federal Perkins Loans:
- Repayment begins nine months after you graduate, leave school, or drop below half-time status.
- You may be allowed up to 10 years to repay your loan. The amount of your payment depends on the size of your debt, but usually you must pay at least $50 per month.
- If you default on a Federal Perkins Loan and the school is unable to collect, it will harm your credit rating and the federal government may take action to recover the loan. You cannot receive further financial aid if you are in default status.
- Certain conditions may make you eligible to apply for a deferment of your Federal Perkins Loan. These conditions include:
- at least part-time enrollment at a postsecondary school
- volunteer work in Peace Corps or ACTION Programs or comparable full-time volunteer work for a tax-exempt organization
- active duty in the U.S. armed forces, Commissioned Corps of U.S. Public Health Service or National Oceanic and Atmospheric Administration Corps
- temporarily totally disabled or you cannot work because you are caring for a temporarily totally disabled spouse or other dependent
- working at an eligible internship
- currently unemployed
- mother of preschool-age children who is going to work (or back to work) at a salary of no more than $1 over the minimum wage
- Certain conditions may cancel repayment of you Perkins loan. These conditions include:
- death or a total and permanently disability
- Cancellation criteria
- Part of your loan will be canceled for each complete academic year you are a full-time teacher of handicapped children, or for each complete academic year you teach full-time in a designated elementary or secondary school that serves low-income students. In both of these cases, your entire loan will have been cancelled after the fifth consecutive year of teaching. To find out whether the school you are teaching in is a designated school, contact the treasurer's office.
- Part of your loan will be cancelled for each year of full-time work in specified Head Start programs. After the seventh year, your entire loan will have been cancelled.
- Up to 70 percent of your loan can be cancelled for service as a Peace Corps or VISTA volunteer--30 percent during the first two years, 40 percent during the next two years. (This deferment applies only to Perkins Loan borrowers, not to National Direct Student Loan [NDSL] borrowers).
- If you serve as an enlisted person in certain selected specialties of the U.S. Army, the Army Reserves, the Army National Guard, the Department of Defense will, as an enlistment incentive, repay a portion of your loan. If you think you may qualify, contact your recruiting officer.
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