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Ascent Blog

When do I have to pay back my student loans?

The world of higher education often means navigating student loans, which can sometimes be confusing. These loans can be a helpful tool for pursuing your academic goals, so you might wonder, “Do I have to pay student loans while in school?”

The answer to this question depends on several factors, and understanding your financial responsibilities while still in school is key to managing your finances effectively. This article will guide you through the details of when, and how, you might need to start repaying your student loans based on your unique circumstances.

Understanding Payment Obligations for Private Student Loans

Private student loans are a popular choice for many students and can help bridge the financial gap if federal loans and scholarships fall short of your total expenses. However, it’s essential to be aware that private student loans often come with repayment terms different from those of federal loans.

Repayment obligations for private student loans can vary depending on the lender. Some lenders may require you to start making payments while still in school. In contrast, others might offer a grace period that allows you to begin repayment after graduation. Reading and comprehending your loan agreement will clarify when your repayment obligations kick in.

Key Differences Between Private and Federal Student Loan Repayment

While private and federal student loans finance education, they differ in repayment terms. Federal student loans may provide more flexibility, including income-driven repayment plans, loan forgiveness programs, and additional deferment and forbearance options.

On the other hand, private student loans are typically offered by banks, credit unions, and financial institutions. These financial institutions generally set the terms and conditions, including interest rates and repayment schedules. Private loans may offer different flexibility or benefits than federal loans. Nevertheless, they can be a valuable resource for students seeking additional funding beyond federal aid. 

Here’s a quick comparison between the two:

AspectFederal Student LoansPrivate Student Loans
Repayment OptionsOffer income-driven plans, loan forgiveness, deferment, and forbearance optionsRepayment terms set by lenders may vary in flexibility
Interest RatesFixed or variable rates set by the governmentSet by the lender and may depend on creditworthiness and market conditions
Grace PeriodTypically offers a grace period after graduation before repayment beginsVaries by the lender; some may require immediate payments during school while other lenders, like Ascent, offer up to 9 months of a grace period 
Loan ForgivenessEligible for public service loan forgiveness and other forgiveness programsFew private lenders offer forgiveness programs
Deferment and Forbearance OptionsGenerous deferment and forbearance options for economic hardshipsTerms and availability may vary depending on the lender

External Factors Impacting Student Loan Repayment

Your ability to repay your loan isn’t always in your control. Broader economic conditions like recessions or high inflation can take a toll on your wallet. So can personal financial challenges like changes in income, employment status, or family size.

What can you do if you find yourself struggling to keep up with payments? Some options to explore include:

  • Deferment or forbearance: You may be able to postpone making student loan payments or reduce your payment amount through deferment or forbearance options. Generally, you’ll have to meet certain criteria to qualify. And you may still accrue interest during pauses in payments.
  • Loan consolidation: You can combine multiple federal loans into a single Direct Consolidation Loan, which may provide access to additional repayment plans and options.
  • Loan forgiveness programs: Depending on the industry you work in, you may qualify for partial or full student loan forgiveness. For example, public service workers meeting specific criteria may be able to take advantage of the Public Service Loan Forgiveness (PSLF).
  • Income-driven repayment (IDR) plans: IDR arrangements enable you to base your monthly payment on income and family size. Examples include Income-Based Repayment (IBR), Pay As You Earn (PAYE), Income-Contingent Repayment (ICR) Plan, and the Saving on a Valuable Education (SAVE) Plan (formerly known as the REPAYE Plan).

In more extreme cases, events like the COVID-19 pandemic can lead to temporary relief measures, such as loan forbearance or suspension of interest accrual.

Do You Have to Pay Private Student Loans While in School?

Whether you pay student loans while in school depends primarily on your lender’s terms and conditions. Some private student loan lenders require you to make full or interest-only payments while in school, while others may defer payments until after you graduate or leave school.

Many private lenders offer flexible repayment options you can tailor to your situation. For example, Ascent offers some of the most diverse repayment options in the industry, with options spanning 5, 7, 10, 12, 15, or 20 years, depending on the loan type. Eligible borrowers may also be able to pause payments for up to 9 months after graduation, or take advantage of our progressive repayment program that lets you gradually increase your payment amount over time.

It’s important to understand your loan’s terms before you borrow. If you’re unsure about any aspect of your loan agreement, don’t hesitate to ask your lender for clarification. Remember, taking out a student loan is a significant financial decision, and it’s essential to understand all the details.

Interest Accrual During School

One important aspect to consider when taking out private student loans is how interest accrues during school. Unlike some federal student loans, which may not accrue interest while in school or during deferment periods, private student loans typically accrue interest from the day the loan is disbursed.

This means that even if you’re not required to make payments while you’re in school, the interest on your loan continues to accumulate. This accruing interest can significantly increase the total amount you owe over the life of your loan, so it’s important to factor this into your financial planning.

Important Considerations and Resources

When dealing with private student loans, it’s crucial to consider all aspects of the loan, not just the repayment terms. Be sure to consider the interest rate, whether fixed or variable, and any potential fees associated with the loan. It’s also a good idea to check if there are any benefits or discounts available, such as cash back rewards for automatic payments.

Remember, if you’re struggling with managing your student loan payments, plenty of resources are available to help. Many lenders offer hardship programs or temporary payment reductions for borrowers facing financial difficulties. Don’t hesitate to contact your lender if you have trouble making payments.

Loan Terms and Repayment Conditions

Understanding your loan terms and repayment conditions is crucial when dealing with private student loans. These terms dictate how much you’ll pay over the life of your loan and when you’re expected to start making payments. Some private lenders like Ascent offer flexible repayment options for college loans, so read your loan agreement carefully or contact your lender for details.

Contacting Loan Services

If you have any questions or concerns about your private student loans, don’t hesitate to contact your loan servicer. Your loan servicer is there to help you understand and manage your student loans. They can provide information about your terms, repayment options, and potential fees or penalties. 

Other Financial Assistance

While student loans can be a helpful tool in financing your education, they’re not the only option. Scholarships, grants, and work-study programs can also provide valuable financial assistance. These types of aid can be particularly beneficial as they don’t need to be repaid. Here’s a more detailed look at these alternatives:

  • Scholarships: These are funds that you do not have to pay back and are often awarded based on merit, which can include academic, athletic, artistic, or other abilities. Scholarships can come from various sources, including schools, private organizations, nonprofits, and community groups.
  • Merit-based Scholarships: These scholarships are awarded based on a student’s academic, artistic, or athletic talent rather than financial need. They can come from colleges or private organizations.
  • Need-based Scholarships: These scholarships are awarded based on a student’s financial need. They often require students to complete the Free Application for Federal Student Aid (FAFSA®) to determine eligibility.
  • Grants: Like scholarships, grants are a type of financial aid that you do not have to pay back. However, grants are typically need-based and may be offered by your state or federal government, college or career school, or a private or nonprofit organization. 
  • State Grants: Many states offer grants, which can be awarded based on need, merit, or specific areas of study. Check with your state’s Department of Education to see what’s available.
  • Work-Study Programs: These programs provide part-time jobs for students with financial needs, allowing them to earn money to help pay education expenses. The program encourages community service work and work related to the student’s course of study. 

Exploring all your options when planning for your education costs is important since every little bit of financial aid can help. Many students will combine several financial aid sources to fund their education to ensure they’re maximizing their federal aid.

Learn More with Ascent

At Ascent, we’re committed to helping students navigate the world of student loans during school and beyond. Whether you’re just starting your college journey or are already working on repaying your loans, we’re here to help every step of the way. Check out our financial wellness hub for more tips on student success, and keep in mind that all Ascent borrowers have access to AscentUP, a resource of academic support, budgeting tips and workplace readiness skills. 


Do I Have to Pay Student Loans While in School?

Whether or not you have to pay student loans while in school depends on the type of loan and the lender’s terms. For federal student loans, repayment generally starts after you graduate, leave school, or change your enrollment status to less than half-time. This means that you typically won’t have to make loan payments during your time as a student, allowing you to focus on your education without immediate financial burdens.

The situation can be different for private student loans. Some private lenders may require payments while you’re still in school. In contrast, others may offer deferment options until after you graduate. If your lender requires in-school payments, factoring this into your budgeting and financial planning during your academic years is crucial.

How Soon Do You Usually Have to Pay on a Student Loan?

The repayment timeline for a student loan can vary based on the type of loan and the terms set by the lender. For federal student loans, repayment typically begins six months after you graduate, leave school, or drop below half-time enrollment. These six months are known as a grace period, which allows you some time to find stable employment and get your finances in order before starting to repay the loan. During this grace period, interest may still accrue on certain federal loans, so it’s important to understand the implications.

Repayment terms for private student loans can vary widely, so check with your lender to understand when your repayment obligations will begin. Some private lenders may offer a grace period, which could be shorter or longer than the federal grace period. Knowing these timelines will help you plan and ensure a smooth transition into the repayment phase after completing your education.

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