Recent Grads: Your Six-Month Student-Loan Grace Period Ends Soon

As Millions Enter Repayment on Their Student Loans, Financial Aid Experts Can Guide Borrowers Through a Maze of Options

Over the next several weeks, millions of borrowers across the country will enter repayment on their federal students loans. Federal Subsidized and Unsubsidized Direct Loans have a six-month grace period during which borrowers are not required to make monthly payments as they secure a reliable source of income after leaving school, but for the Class of 2015 the grace period is nearly up.

While any debt burden may seem daunting, there’s good news for federal student loan borrowers: Many repayment options are available to help them repay their loans at a manageable rate. The National Association of Student Financial Aid Administrators (NASFAA) has experts available to weigh in on which paths might be the best fit for certain borrowers.

Nationwide, about 60 percent of students who graduated from public and private nonprofit institutions in 2013 took out a federal loan to finance their education, according to the College Board’s Trends in Student Aid 2014. While many borrowers choose to enter a standard plan to repay their loans within 10 years, NASFAA urges borrowers experiencing financial hardship to take advantage of the several income-driven repayment plans available to federal loan borrowers, which cap the borrower’s monthly payments at a certain percentage of his or her income, typically 10 or 15 percent.

The Department of Education (ED) recently released data showing the 2012 student loan cohort default rate dropped from 13.7 percent to 11.8 percent, perhaps an indication that efforts to increase utilization of income-driven repayment are working. Income-driven repayment options function as a type of “safety net” option to help borrowers who may be struggling financially avoid falling into default. While interest continues to accrue on the principal balance of the loans, entering into an income-driven repayment plan can temporarily lower monthly payments. Under certain plans, remaining debt may be forgiven after 20 years of on-time payments.

“No student should default on his or her student loans due to financial distress,” said Justin Draeger, president and CEO of NASFAA. “It’s important that borrowers are aware of all options available to ease the burden of monthly student loan payments and stay on the path toward full repayment.”

For help, borrowers can reach back out to their college’s financial aid office with questions about selecting their repayment options, and utilize NASFAA’s Default Facts and Tips for Struggling Borrowers. By kicking off on-time payments this fall, borrowers will position themselves to pay off their debt responsibly–and without breaking the bank.

To request an interview with a NASFAA spokesperson, please email or call (202) 785-6959.


The National Association of Student Financial Aid Administrators (NASFAA) is a nonprofit membership organization that represents more than 20,000 financial aid professionals at nearly 3,000 colleges, universities, and career schools across the country. NASFAA member institutions serve nine out of every ten undergraduates in the United States. Based in Washington, D.C., NASFAA is the only national association with a primary focus on student aid legislation, regulatory analysis, and training for financial aid administrators. For more information, visit

Publication Date: 10/20/2015

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