Going Back to School
Dear Betsy,
I received my undergraduate degree this past May and will be starting a graduate degree in January of 2004 at the same institution. Last week I received a letter in the mail from my student loan company stating that my loan payments will begin in November of 2003. I was under the impression that I didn’t have to start paying until I was finished with school; have I been misinformed?
Sincerely,
Todd R.
Dear Todd,
There are several criteria needed to be eligible to postpone your student loan payments while you are attending school. First, you need to be enrolled at least half time (as defined by the school). The 1st time you drop below half-time status, which in your case is your graduation date, a new status, called a grace period, kicks in. Most federal student loans allow 1, 6-month grace period per loan, but if you happen to go back to school on at least a half-time basis before that 6 months is up, you remain eligible for the full grace period the next time you drop below half-time. Your graduation date of May of 2003 would result in your grace period ending somewhere around November, so the letter you received is accurate. Once you start school in January, contact your loan holder and ask for a school deferment form to be sent to you. Fill out your portion, then bring it to the school’s registrar’s office to be completed before returning it to the loan holder. Assuming all eligibility criteria are met, your student loan payments will be on hold while you continue your studies. Remember that at this point you will have used your allotted grace period on your existing loans, so once you leave school or become less than half-time, payments will begin immediately.
Hope this is helpful,
Betsy
