Will payments on college loans start early if I decide to defer my junior year?

<p>I am planning on deferring my junior year between transferring from a two year school to another for my final two years. Would payment on interest and loans such as the stanford and perkins loan start that defferred year, or would I still have the ability to pay after I graduate from my senior year in school?</p>

<p>Yes, you would be required to make monthly payments during your gap year, after the grace period is up. (You can request that they use the Income Based Repayment option if you're concerned about not being able to afford the standard payment amounts.) But you could then defer your loans once you're back in school. Btw, you have Stafford, not stanford loans.</p>

<p>Your loans will come due roughly 6 months after you stop attending school. If you enroll later at a different college, the loans will go back into deferment status.</p>

<p>If you plan to work during the year you are out of school, this is not necessarily a bad thing, as it gives you a head start on paying down loans, which reduces your overall indebtedness at the end of the process.</p>

<p>Just to be clear, Stafford loans have a six month grace period, Perkins loans are 9 months. Also, I'm pretty sure that's a one-time only grace period for Stafford - if it expires, you will not get a grace period next time (after you graduate from a 4 year school) although you can request a student deferment when you're enrolled at least half-time. Perkins is a little more generous in that those loans may be eligible for a new 6 month grace period after a deferment. I'm not sure what happens with the interest on subsidized loans during the grace period or deferral period - you might want to look into that and, depending on what your subsidized loan balances are, you would probably want to pay at least the interest portion if they are no longer subsidized.</p>

<p>For subsidized loans, there is no interest running during deferral periods. I also think that there is some sort of grace period on the Stafford the 2nd time around -- my son attended college for 2 years, then off 3 years, then back for another 2 years -- and I remember him mentioning after he graduated that he planned to pay off the balance of the loans before the grace period expired. (By that time he also had an Americorps benefit that he could apply to the loans, so that was a very reasonable goal for him). I wasn't directly involved in it... so I couldn't give precise numbers -- just that he had some sort of time before interest started running again.</p>

<p>Hmm..it's possible that the rules have changed. I can't remember where I originally read something about the deferment of Staffords (maybe in loan docs?) but this is from UCLA's website:</p>

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[quote]
Regardless of whether you received subsidized or unsubsidized funds, your Stafford Loan has a six-month grace period. If you allow your six-month grace period to elapse after leaving school, your Stafford Loan will not be eligible to receive a new grace period in the future. However, if you interrupt your initial grace period by going back to school, enroll in enough units to maintain at least half-time status in a qualifying course of study and file the appropriate student deferment form, you will be allotted another six-month grace period.

[/quote]
</p>

<p>Student</a> Loan Services & Collections - How To Understand Your Loan's Grace Period</p>

<p>You are right - the rules could have changed -- my son's loans were taken in 2001-2003 - he paid them off in 2008 -- they were originally through Sallie Mae. Now that things have gone entirely to direct lending, there could be a variety of changes in procedures.</p>