Short Leave from School

Dear Joel,

When you drop below half-time in school, a status (which is called your grace period) will automatically kick in. The grace period is a 6 month period of time intended for recently out of school students to become established before the first payment on their federal loans is due. If you return to school on at least a half time basis before that 6 months is over, not only will you not be due for payments on your loans, but you will have that entire 6 month period available to you when you leave or graduate. If you do not return to school within that 6 months then yes, you will be due for payments at least until you do go back to school. If you find yourself in that situation and are unable to make your payments, talk to your loan holder about any lower payment options you may be eligible for. There are also deferments that you may qualify for that would postpone your payments altogether. You should note that grace periods are an all or nothing situation. In other words, if you are out of school for the full 6 months or more, you will not get another 6 month grace period when you re-enroll and graduate.

Good luck,
Betsy