Understanding Student Loan Repayment

Grace: period of time after a borrower graduates, leaves school or drops to less than half-time

  • No payments required during this period
  • Time varies based on loan type
  • Does not adversely impact credit

Deferment: period when borrower who meets certain criteria may suspend loan payments

  • In-School
  • Economic Hardship
  • Military
  • Unemployment 
  • Graduate Fellowship

Forbearance: typically sought for temporary repayment relief and provides temporary adjustment of no payments or reduced payments

  • Be careful to use because it adds expense
  • But can be very useful to help avoid delinquency and default