Deferred Student Loans Will Still Require Repayment
Many students have may be of the mistaken belief that all loans received for a college education are considered deferred student loans with repayment beginning some time after the students has graduated from college. While there are some loans that qualify for deferred status, there are many more that payments have to be made while the student is still attending classes.
Many deferred student loans, such as the Stafford Loan require no payments until after graduation, with an additional six-month grace period. Any amount borrowed will have to be repaid after graduation, or if the student drops below part-time status or drops out of school. As long as the student remains enrolled in a qualified educational institution, the loan is considered one of the deferred student loans.
Stafford Loans have two options, one in which the loan is granted by the school and the other is when a private lending institution grants the loan, which is guaranteed by the federal government. In either case, loan repayment requirements remain unchanged. A Perkins loan, issued by the school, is backed by funds made available by the government and the amount of funding is limited and dependent on financial need.
Some Loans Require Quicker Repayment Schedule
Other non-deferred student loans available for students and their parents, such as the Federal Direct Parent Loan for Undergraduate Students will issue a loan based on the amount estimated by the school for classes and other expenses minus any scholarships or other aid received by the student. Repayment is scheduled to begin within 60 days of the full amount being disbursed to the school. A similar plan is available through the Federal Direct Graduate PLUS Loan with the same repayment requirements.
For many unsubsidized loan agreements, money borrowed under a deferred student loans agreement do not require repayment until after graduation. However, on many of these loans interest will accrue from the date of the loan. Students are encouraged to make interest payments through the life of the loan or the interest amount will be added to the principal amount of the loan.
Many of these loans are considered for students not qualifying for need-based assistance and they are considered unsecured loans. For many that are found to need the loan to make attending college a reality, deferred student loans can be found that delay repayment until after graduation. There are some occupations that will allow repayment to be deferred for up to 36 months in some exception cases.
