Stafford Loan Grace Periods???

[adefaultusername]

I called Sallie Mae today about the following question, but I did not get a clear answer since I couldn’t understand the operators’ English. Here is what I am wondering:

I have an Subsidized Stafford Loan. Once I graduate from undergrad I have a 6 month grace period. After that, I have to start paying on my student loan. If I take say a year off from school (during which time I will be making payments on the loan) and then enter grad school, will I have to keep making payments, or will entering into school again make it to where I don’t have to make the payments (even though the initial 6 month grace period has passed)?

Thanks a lot!

[engineer_comp_geek]

IIRC, if you don’t want to make payments, you will have to apply for a deferment once you enter grad school.

[pendgwen]

If you go back to school full time your loans will go back into deferrment. Sallie Mae will need documentation from your school to prove that you’re a student. At my school the financial aid office took care of that automatically but I don’t know if that’s universal.

[Dr.Drake]

The way it was explained to me (mid-1990s, the rules may have changed), you get one six-month grace period per loan. So if you take a year off between grad & undergrad, you have six months of grace and six of repayments. Say you then go to grad school and take out more loans. Upon graduation, you have a six-month grace period for the new loans, but your undergrad loans start repayment at once.

That said, SallieMae is pretty good about granting forbearances and such.

[lilflower]

You can apply for another deferment even after you’ve made payments and/or utilized your initial 6-month grace period.

From the Sallie Mae website:

Deferment: A period of time during repayment in which you, upon meeting certain conditions, are not required to make regular monthly payments.

Available deferments programs are:

ACTION Program: Covers full-time paid volunteer service with an organization participating in a program authorized under Title I of the Domestic Volunteer Act of 1973.
Economic Hardship: Covers a borrower who earns less than minimum wage or exceeds a federally defined debt-to-income ratio. Also covers borrowers who are receiving public assistance or who are serving in the Peace Corps.
Graduate Fellowship: Covers study under an eligible graduate fellowship program.
**In-School (Student): Covers both full-time and half-time study at eligible schools. **
Internship / Residency: Covers service in an internship program that is required to receive professional recognition needed to begin professional practice or service. Also covers service in a medical internship or residency training program that leads to a degree or certificate awarded by an institution of higher education, hospital, or a health care facility that offers postgraduate training.
Military: Covers active duty status in the U.S. Armed Forces.
National Oceanic and Atmospheric Corps: Covers active duty service in the National Oceanic and Atmospheric Administration Corps.
Parental Leave: Covers a borrower who is pregnant or caring for their newborn or newly adopted child. Borrowers cannot be working full-time and must have been enrolled at least half-time in school six months prior to beginning the deferment.
Peace Corps: Covers volunteer service under the Peace Corps Act.
Primary Care Physician: Covers practicing primary care physicians that completed an internship in one of the following specialties: osteopathic general practice, family practice, general internal medicine, preventive medicine, general pediatrics.
Public Health Service: Covers service as a full-time officer in the Commissioned Corps of Public Health of the U.S. Public Health Service.
Rehabilitation Training Program: Covers a qualified individual’s participation in a rehabilitation training program.
Summer Bridge Extension: Covers summer months for students who are deferred through the end of the spring academic period and are planning to reenroll for the fall academic period.
Tax-Exempt Organization Volunteer: Covers full-time paid volunteer service with a tax-exempt organization that the U.S. Department of Education has determined to be comparable to service as a Peace Corps or ACTION volunteer.
Teacher Shortage Area (Targeted Teacher): Covers full-time teaching in a public or nonprofit private elementary or secondary school located in a teacher shortage area as defined by the U.S. Department of Education.
Temporary Total Disability: Covers a period during which a borrower is temporarily totally disabled or unable to secure employment because they are caring for a dependent or spouse who is temporarily totally disabled.
Unemployment: Covers individuals who are seeking, but unable to secure, employment in the United States. The borrower can be receiving unemployment benefits.
Working Mother: Covers mothers of pre-school age children when the mothers are entering or reentering the workforce.

[aktep]

@Dr. Drake

The way it was explained to me (mid-1990s, the rules may have changed), you get one six-month grace period per loan. So if you take a year off between grad & undergrad, you have six months of grace and six of repayments. Say you then go to grad school and take out more loans. Upon graduation, you have a six-month grace period for the new loans, but your undergrad loans start repayment at once.

I think this is still true, but when I finished grad school in 2004, my loan servicer (Nelnet) automatically granted an extra deferment on my undergrad loan to bring it in line with my graduate loan, as a convenience to me.

[Jelymag]

I was paying back my Stafford loan and taking some graduate level classes in evenings/summers. At one point I was enrolled in enough credits that Sallie Mae got notice from the school I was attending and automatically sent me a letter saying that I was getting a deferment until my enrollment droppped below the certain number of credits. So, in my case, I didn’t even have to do anything to get the deferment. As far as grace periods, my understanding has been that if you graduate from whatever you’re doing, you get the six-month period. If you just take a break, repayment starts immediately. YMMV.