One benefit of choosing a federal student loan is the 6 month grace period most students receive after they graduate, leave school, or drop below half-time enrollment. Payments are not required during the grace period, which allows you time to get financially settled and prepared for repayment.

If your student loan grace period is coming to an end, here’s what comes next.

Steps to Take Now

Don’t wait until your student loan grace period ends to take action. The first step is to update your contact information with your loan servicer and on studentaid.gov. This step will help to ensure that you’re receiving accurate information about your loan and the required payments.

Next, consider enrolling in automatic payments. Federal student loan borrowers who sign up for automatic payments are entitled to a 0.25% interest rate reduction—plus, autopay usually means fewer late fees or missed payments. Just be sure that the account associated with your automatic payment has enough funds to cover your monthly payments.

As your student loan grace period comes to an end, be on the lookout for communication from your loan servicer. If you have any questions about how much is owed and when, give them a call or check studentaid.gov for more information.

Choosing a Payment Plan

The Standard Repayment Plan for federal student loan borrowers is a 10-year fixed repayment plan, which means your monthly payment is a fixed amount for 10 years, based on what you owe and your interest rate. Most times, this is the repayment plan that students are automatically placed on by default.

 
However, some graduates may benefit from choosing a non-standard (but still fixed!) payment plan. The Graduated Repayment Plan offers lower monthly bills for the first few years, after which payments gradually increase. This plan can be a good option for borrowers who expect to steadily increase their earning power. Another option is the Extended Repayment Plan, which offers a 25-year repayment period and is available to borrowers who owe over $30,000.

Having a fixed monthly payment offers financial consistency, but borrowers can also choose an Income-Driven Repayment (IDR) Plan. With an IDR Plan, payments change over the life of the repayment period based on the borrower’s income and family size and can be as low as $0 a month.

If you’re interested in an Income-Drive Repayment Plan, check out the SAVE Plan which debuted in July 2024. The SAVE Plan calculates monthly payments based on a smaller portion of adjusted gross income and introduces government coverage for some interest, which results in borrowers paying less each month and over the long term.

Public Service Loan Forgiveness

Borrowers who work full time for a government or not-for-profit organization may be eligible for loan forgiveness under the Public Service Loan Forgiveness (PSLF) Program. The program is available to Direct Loan borrowers who have made 120 qualifying monthly payments while working for an eligible employer.

People who work in education, law enforcement, public health, governmental family service agencies or public library services are often eligible for the PSLF program. More information on eligible employers is available at studentaid.gov. You can also search for your employer using the P SFL Employer Search tool online.