Loan Repayment: When to Repay and How it Works

Utilizing a loan or loans to help pay the cost of your education? There are a few things you should know regarding repayment of these loans.

**Before reading, please note that the information below is true of federal loan repayment and many private lenders; however, private lenders have the right to alter their repayment processes and procedures in whichever ways they choose. If you borrow private loans to help fund your education, please read the terms and conditions of these loans carefully and contact your lender regarding repayment.**

When Does Repayment Begin?

While students are attending school, many of their loans will be deferred. Deferment is a temporary postponement on payment of a loan. Many students believe that their loans are deferred until graduation. This; however, is not the case. There are specific scenarios, including graduation when a student is required to begin repayment on their loans. These include:

  • Graduation
  • Falling below half-time enrollment (taking fewer than 6 credits for undergrads and 5 credits for grad students)
  • Taking a leave of absence
  • Not attending school

If you graduate and then return to school for another degree or you left school and want to return, your loans will go back into deferment once you are enrolled and taking classes. As long as you are enrolled at least half-time in a degree-seeking program, meaning you are pursuing a degree, your loans will be deferred.

Stockton University’s Office of Student Records sends out a Verification of Enrollment through the National Clearing House to all lenders updating your enrollment status each semester. This typically happens after the add/drop period of each semester.

Please note that you do not need to be enrolled in the summer semester to have your loans deferred. You just have to maintain at least half-time enrollment in a degree-seeking program during the fall/spring semesters to have your loans remain in deferment.

In certain scenarios, you can apply for loan deferment even when you fall into one of the categories above. Examples include, economic hardship, cancer treatment and military service. Click here to learn more about loan deferment options.

How Does Repayment Work?

Typically, lenders will give borrowers a one time 6 month grace period after they either graduate, stop attending or fall below half time enrollment. Once this grace period is over, repayment begins.

If you use up the full or a portion of your grace period and then begin attending school at least half-time, you will lose the time used for the grace period. For example, if you use the entire 6 months of the grace period after taking a leave of absence and then attend school until your graduate, you will have to begin your repayment immediately after you graduate.

Loan servicers/lenders will usually contact students by mail regarding their repayment; however, it is always good practice to contact your servicer/lender after you graduate, fall below half-time enrollment or leave school.

Students select repayment options with their servicers/lenders. Options for federal direct loan repayment include, standard, graduated, extended and income driven repayment plans to name a few. Click here to learn more about federal direct loan repayment plan options.

Depending on the repayment plan you choose, your payments will vary. Under the standard repayment plan for federal direct loans, you will pay a specific amount monthly for a certain number of years. Use the Loan Simulator here to determine which repayment plan or plans you may qualify for.

Have questions? Contact your loan servicer or lender regarding any repayment questions you may have. Federal direct loan servicer/loan balance information can be found by logging on to

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