When Do I Need To Start Paying Back My Student Loans?

Mar. 23, 2015

Dear Cathy:

I just finished up with 4 years of undergraduate studies and I need a break from school for now.  So I am not sure if I will attend a graduate degree program at this time.  When will I need to start paying back my student loans? Responsible College Student, North Carolina

Dear Responsible College Student:

If you are getting ready to graduate or have graduated recently from undergraduate studies and haven’t heard from your loan servicer, make sure you check that they have up-to-date contact info for you including your address, email and phone changes.  Make sure this information is being mailed to you - not your parents.

Remember students will have to start paying back their student loans 6 months after they finish with a college or a university -- unless they inform lenders or loan servicers they are continuing their education.  You don’t have to begin repaying most federal student loans until after you leave college or drop below half-time enrollment.  However, PLUS loans enter repayment once your loan is fully disbursed (paid out). 

Your lender or loan servicer must provide you with a loan repayment schedule that states when your first payment is due, the number and frequency of payments, and the amount of each payment.  Keep in mind that your loan may have a grace period. 

Some students take up to 30 years or more to pay back these loans so don’t think this will be an overnight process.  Depending on your work situation, the amount can be negotiated several times so the goal is to stay in touch with these loan servicers and don’t default on your student loans.

If you neglect to send in student loan payments for nine (9) months, you are technically in default.  If you default on your student loans, the government can take your income tax; Garnish your wages (10 to 15%); Take you to court; and you might not be able to renew a professional license.