After borrowers graduate, leave school or drop below half-time enrollment, they will have several months before payments are due on loans that were made for that period of study. This is called the “grace period.”
Grace periods for subsidized loans extend to 6 months after borrowers leave school or are no longer enrolled at least half time. During the grace period, no interest is added to subsidized loans. Interest is added to unsubsidized loans during grace periods, and this interest is added to the amount borrowed when your loan payments are scheduled to start, so you actually pay additional interest on the interest. This is called Interest Capitalization.
Borrower repayment periods begin the day after the grace period ends. First payment will be due within 60 days after the repayment periods begin.
Each loan has only one grace period. If borrowers return to school after the grace period has expired, the borrowers’ loans qualify for in school deferment if enrolled for at least 6 credits. When the borrower leaves school, the loan returns to repayment immediately. There is no additional grace period.
You are able to make payments on your student loan while you are still enrolled. If you have unsubsidized loans, you are also able to make payments on the interest that is being added. If you do not pay the interest, it will be capitalized. Be sure and ask your lender about interest capitalization.