[Photo: student looking at paperwork; Source: Linda Cicero/Stanford News Service]

Learn how to: Successfully repay your student loans after you graduate, leave school, or drop below half-time enrollment to avoid added collection costs and/or damaged credit.

For: Student loan recipients

On this page:

Complete Loan Entrance & Exit Counseling

Students with federal educational loans are required to be counseled about their rights and responsibilities before receiving their first loan distribution and again before they graduate or otherwise leave school.

  • Complete entrance counseling before receiving your first loan distribution
  • Complete exit counseling before graduation or otherwise leaving the school. During the exit counseling, review the following with the University and/or lender:
    • Loan repayment terms (including grace periods) and conditions
    • Loan repayment schedule
  • To complete exit counseling for your federal Perkins, Avery Loan or other Stanford University institutional loans, visit the University Accounting Service, LLC (UAS) web site.
  • To complete exit counseling for your federal Direct or FFEL Subsidized Stafford, Unsubsidized Stafford and/or Graduate PLUS loans, visit the National Student Loan Data System web site or the web site of your FFEL lender.

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Understand Grace Periods

Grace periods are the short period of time after graduation during which the borrower is not required to begin repaying his or her student loan. The grace period may also be triggered if the borrower leaves school for a reason other than graduation or drops below half-time enrollment. During the typical grace period, borrowers do not have to make payments. For borrowers of Perkins and Subsidized Stafford loans, interest will not be charged during the grace period.

  • Identify the grace period (if applicable) for each loan you have received. The length of the grace period depends on the type of loan you received. For example, the following are some common loan types and associated grace periods:
    • Avery Forgivable Loans – 6 month grace period. Interest accrues from the date of disbursement.
    • Federal Direct or FFEL Stafford Loans (Subsidized / Unsubsidized) – 6 month grace period
    • Federal Perkins Loans – 9 month grace period; 6-month grace period for "post deferment" periods
    • Federal Direct or FFEL Graduate PLUS Loans – 6 month grace period
    • Federal Direct or FFEL Parent PLUS Loans - No automatic grace period. Interest starts to accrue upon first disbursement, which means that you begin repaying both principal and interest while the student is in school. Your loan holder may agree to postpone payments while the student is in school at your request, but this is at the loan holder’s discretion.
  • Contact your lender or the Stanford Financial Aid Office for questions about loan terms, grace periods, and repayment options

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Make Loan Payments

Repayment begins after the loan grace period (if applicable) and when your first payment is due. The repayment schedule discloses the monthly payment, interest rate, total repayment obligation, payment due dates and the term of the loan. The term of the loan is the period during which the borrower is required to make payments on his or her loans. When payments are made monthly, the term is usually given as a number of payments or years.

  • Avoid default and added collection costs by making your payments on time:
    • A loan is in default when the borrower fails to meet the terms and conditions of the promissory note, such as not making timely payments on the loan.
    • If you default on a loan, the lender (e.g. University, state or federal government, or other loan holder) can take legal action to recover the money, including garnishing your wages and withholding income tax refunds.
    • Defaulting on a government loan will make you ineligible for future federal financial aid, unless a satisfactory repayment schedule is arranged, and can affect your credit rating.
  • Follow these suggestions to help you avoid defaulting on a loan:
    • Understand the terms of your loan
    • Maintain your contact information
    • Set up automatic payments
    • Contact the lender as soon as you need help

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Monitor Your Loans

Students are strongly advised to monitor the status of their loans until they are paid in full. Student loans are no different than car loans or mortgages. Manage them responsibly.

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Loan Deferment and Cancellation Provisions

Federal Perkins, Stafford and Avery Forgivable loans all have cancellation / forgiveness provisions. Eligible borrowers can have 50 to 100 percent of the loan cancelled.

Under certain conditions, the borrower can defer payment. Borrowers should contact their school or lender to find out more about these important benefits.

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