Status of a Student Loan If You Take a Year Off

Student Taking a Year OffAlthough a college education is an exciting endeavor, and in many cases, the momentum of staying in school propels a student toward the completion of his or her degree, there are many reasons why a student might want to take some time off from school. While it may not seem wise to some to break the flow of consecutive schooling, time away from school can be invaluable and life-changing for some students. Harvard recommends that all students consider taking a year off and reports that 80 to 110 of their students each year choose to do so.

Some of the reasons why a student might take time off from school include:

How Is Loan Status Affected?

If you’re taking a year off of school, you might be curious about what will happen in terms of your student loan status. You might be wondering when you need to begin repayment, among other things.

How soon you will need to begin repaying your loans once you pause your education depends on the types of loans you have. Certain kinds of loans will allow you a longer grace period before repayment begins than others will. For instance, if you have a Perkins Loan, you can wait nine months before you begin repayment. However, if you have a Stafford Loan, you will have to begin repayment in just six months. For some students, the fact that these grace periods are shorter than one year influences their decision to take just a semester off instead of a full year. Each loan is different, and you should meet with your financial advisor to create a plan of action for your year off as well as repayment.

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