How does student debt work when you start Graduate school as soon you finish undergraduate?


I’m starting graduate school to study Math this August! I was wondering do I have to start paying my student loans as soon or is there a break (six months)? However, does this apply to people who is not going to grad school? What is Deferments and forbearance? I have a loan of 34K which is honestly not bad considering took me 7 years to finish. Just 22 more days until last final! Is there anything I need to look out for?

Your loans are in deferment for six months after you graduate, assuming you never left school long enough in the past to already get a six month deferment (that is, you were never out of school long enough to trigger repayment). If you don’t go to graduate school, you will have to start paying on your loans six months after the last day you were in school at least half time. If you begin graduate school before the six months are up, your loans will be in automatic deferment as long as you are enrolled at least half time. The exception is Perkins loans … if you have a Perkins loan, you have to contact the servicer to request an in school deferment.

Please do exit counseling here: Federal Student Aid. It is really important!


Deferment is a temporary pause in loan payments. When you are in school at least half time, your loans are in an in-school deferment. Your subsidized loans do not accumulate interest during that time, but your unsubsidized loans are always accumulating interest. The interest on those loans will be added into the loan as soon as your six month grace period is over, at which time you’ll start accumulating interest on the interest. For that reason, it’s wise to try to pay off as much accumulated interest as possible before the end of the grace period.

Forbearance is something you request if you are supposed to start paying but can’t pay at that time. You should never have to request forbearance if you stay on top of your repayment obligations. If you can’t afford your standard ten year repayment amount, you can enroll in an income driven repayment plan. Your payment will be based on your income (it could be as low as zero). This ends up costing more in the long run due to accumulating interest, but it allows you to afford your payments. If you plan ahead & enroll before your grace period is over, and if you recertify your income annually & on time, there will never be a reason to request a forbearance.

If you’re not planning graduate school, then the loan payments will be due 6 months after you graduate. Your loan is a 10 year fixed plan by default. The best thing to do is call Sallie Mae before your loans are due and talk about consolidation options. In fact, they’re the best people to call about all your questions :slight_smile:

Just some quick basic info:

A deferment means that you make no payments or accrue any interest on government subsidized loans, as long as you’re actively in college. At the present, all student loan payments are deferred because of COVID-19 until September.

A forbearance is when you make no payments, but interest still accrues. That usually happens if there’s financial hardship, such as a low starting salary, etc.

You DO accrue interest in unsubsidized loans during periods of deferment (except during this federally mandated interest pause, which will eventually expire). It’s only paused on subsidized loans (including Perkins) during deferment. OP has unsubsidized loans, because the total exceeds the sub loan limit.

As far as consolidation is concerned, it’s typically not necessary. Consolidation can end up costing you more in the long run. I would generally recommend against it, unless you have Perkins loans that you want to consolidate into a Direct loan … but even then, I would recommend not doing that if you can possibly pay the standard payment on the Perkins loan. This is because your consolidation loan will have an interest rate that is a weighted average of the interest rates of each of your loans. Perkins loans have a low interest rate, which can end up increasing due to consolidation. You might also need to consolidate in order to make all of your loans eligible for PSLF (FFEL & Perkins loans would need to be consolidated into a Direct loan to qualify).

This is a really good explanation, straight from the source: Federal Student Aid. I would recommend checking out what would happen if you were to consolidate, based on your loans. I don’t know if the federal website has a calculator that allows you to log in & automatically populate your loans. You can log in on the link I am providing to the demo, and you can poke around for a loan consolidation calculator. In any case, you can use the federal consolidation calculator demo, but you will still need to log in to find your loan information so you can correctly populate the calculator:!/demoConsol/1#%2FdemoConsol%2F1.

Thank you, everyone. So I just checked and apparently, I have taken a Subsidized and Unsubsidized loan.