When Are Student Loans Due? Your Repayment Questions Answered

5 minute read

Graduating from college can be one of the most exciting yet stressful times of a student’s life. You’ve finally accomplished your goal of earning a degree, but now you have to figure out how to make that degree work for you. There are so many decisions to make! Will you continue on to grad school, start looking for your dream job, or take some time off to figure out your next move? If you’re like most students, you’ll also be taking on new financial responsibilities, like paying back student loans, and that can feel overwhelming. Sure, you skimmed over the multiple pages of information when you received your loans, but you may still be wondering, “When are student loans due?” The answer to that question depends on the type of loan you have.

When do you start paying student loans back?

In most cases, after you graduate from college or leave school, you’ll start repaying student loans after a six-month grace period, but you may not want to wait that long (more on that later). It’s a good idea to go ahead and review the terms of your loan now to make sure you know exactly what to expect. Here are some details to look for:

Federal Loans

The federal government is one of the largest providers of student loans, offering multiple types with various repayment options. Federal loans may be subsidized or unsubsidized. Remember filling out the Free Application for Federal Student Aid (FAFSA) each year? Information from the FAFSA is used to calculate each student’s level of financial need and determine which federal loans they’re eligible for.

• Subsidized loans are available for undergraduate students who demonstrate financial need. The best part about these loans is that the U.S. Department of Education pays the interest on your loan as long as you’re enrolled in college at least half-time and during the six-month grace period after you graduate. Once the grace period ends, you’ll be responsible for paying back the money you borrowed plus any interest that accrues during your repayment period. However, you may be eligible for an Income-Driven Repayment (IDR) plan, which could lower your monthly payments and possibly lead to some of your loan balance being forgiven. 
• Unsubsidized federal loans aren’t based on financial need and are available to undergraduate, graduate, and professional students. The big difference is that you’ll be responsible for paying the interest that begins accruing as soon as you receive the funds. You won’t have to begin repaying your loans until six months after you leave school, and you’re also eligible for different repayment plans, including IDR.

Private Loans

Even if you have federal loans, you may also have private or alternative loans. There’s no standard answer to the question, “When are student loans due?” because alternative loans are issued by different banks, credit unions, or other entities. If you haven’t done so already, now is the time to review the terms of your loans carefully so you’ll know exactly when you must begin repaying them and how much to pay.

Private loans may be more or less expensive than federal loans. For instance, the NC Assist Loan has competitive fixed rates without any fees. In fact, some of our current rates are lower than those offered by the federal government.

With the NC Student Assist Loan, you don’t have to begin repayment until six months after you graduate (or fall below half-time enrollment), but you will be responsible for paying all the interest that accrues on the loan.

Pro Tip: You can reduce your interest rate by 0.25% during the repayment period of your NC Assist Loan by enrolling in auto-draft payments. It’s a good way to save money and never miss a monthly payment.

Are there benefits to paying student loans early?

In general, it’s a great idea to begin paying off your federal or alternative loans as soon as possible. If you have private loans, always check with your lender first to see if there are penalties for early payment. NC Assist never charges a prepayment penalty, but some commercial lenders do. There are a couple of big advantages to beginning your loan payments before you have to:

1. You’ll save money. Unless you have subsidized federal loans, the money you borrowed has been accruing interest since the day it was disbursed. If you choose not to pay the accruing interest while you’re in school or during your six-month grace period, that interest will be capitalized (added to the current principal balance) when your loan enters repayment. That means you’re paying even more money to cover the accrued, unpaid interest. If you can afford to pay off the interest as it accrues, you’ll save lots of money. If you can’t afford to pay anything while you’re in college, begin making payments (and when possible, overpayments) as soon as you can. The longer your loan lingers, the more interest accrues, and the more you’ll spend to repay it. You can use a student loan payoff calculator to see just how much you could save by paying early.
2. You’ll build good credit. Your loan payments are reflected on your credit report. Just as missed payments can leave a bad impression on creditors, making payments early shows that you’re starting good financial habits and managing your money responsibly. So, in addition to saving money on accrued interest now, you’re also working towards a better credit score down the road.

Learn more about NC Assist Loans

NC Assist is dedicated to helping students with a North Carolina connection attain their higher education goals. We know you have questions about student loans, and you can find answers on our student loan FAQs page.

If you’re still in school and need some extra funds to help you cover upcoming college expenses, we’re here for you! Submit an NC Student Assist Loan application today.