Know Your Repayment Status
Parent’s Section
Student loans that fall behind can affect a parent in 2 ways:
- If you used Parent PLUS loans to pay for a child’s education, your credit will be damaged if you do not keep the loan in good standing
- If you are listed on the student’s loan application or MPN as a reference you may be contacted to provide information about the student if they do not keep the loan in good standing or if they do not keep their contact information updated with their loan holder
Managing your education debt is a big responsibility, but it’s easier if you understand the loan process and keep track of your loan repayment status. If you’re not sure about your loan’s current status, you can check at the National Student Loan Data System (NSLDS).
Exit Counseling
Your school is required by law to provide you with exit counseling on what will be expected of you when you begin repayment. Your counseling may be facilitated by a school official or other knowledgeable financial aid counselor, or it may be offered as an online tutorial. This is an important step in the process of good loan management, and a good time to ask questions about your loan repayment.
Grace Period
During the grace period, no payments are due on your loan, so you can settle into your post-college life and find a job. If you have a Stafford Loan, your grace period is 6 months; if you have a Perkins Loan, the period is 9 months.
For PLUS Loans disbursed before July 1, 2008, repayment begins on the loan’s principal and interest as soon as it is fully disbursed. For PLUS Loans first disbursed on or after July 1, 2008, the borrower may choose to start repayment either (a) no later than 60 days after the loan is fully disbursed or, (b) upon request, 6 months after the student for whom the loan was borrowed drops below half-time enrollment.
If you’ve followed a traditional college-education schedule, you’ll find that your first loan payment after the grace period is usually due somewhere between mid-November and mid-December of the year in which you graduate. If you graduated in the middle of the academic year, your payment will be due around mid-June of the summer after you graduate. However, if you’ve taken time off from school during your education, you may have already used up some or all of your grace period.
Repayment
Your student loan must be repaid. There is no statute of limitations on your loan. Payments will be due until the loan is paid in full.
Your student loan payments are due monthly. The minimum payment is $50 for Stafford and PLUS Loans, and $40 for Perkins Loans (except for your final payment, which is just the remaining balance).
If you have trouble making your payments, there are alternate repayment plans that lower the amount you need to pay each month. If necessary, you can even get permission to temporarily suspend payments with a deferment or forbearance. It’s important to contact your lender or servicer to find out your options before you miss a payment.
