Do You Have to Pay Student Loans in Graduate School?

Student loans usually aren’t due during graduate school, but paying them can decrease the amount you owe.

Ryan LaneSeptember 11, 2020
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You typically don’t have to pay student loans in graduate school. You can defer payments on federal loans and most private student loans if you're enrolled at least half-time.

But interest will accrue on all graduate school loans and any unsubsidized undergraduate loans during a deferment, increasing the amount you owe. If you can afford to make payments, you’ll likely save money in the long run.

Are student loans deferred if you go to grad school?

All federal student loan payments — including parent PLUS loans taken out on your behalf — can be deferred if you go to graduate school at least half-time. You can also defer federal loans during an eligible full-time graduate fellowship.

Universities have their own definitions for half-time enrollment. Check with your school’s financial aid office if you’re unsure of your status. For example, if you’re working your way through graduate school and taking only one course, payments will likely still be due.

For private student loans, most lenders also let you defer graduate loans if you’re enrolled at least half-time. But you may need to meet additional criteria to not pay existing undergraduate loans.

For example, Advantage Education Loans requires you to start graduate school during your grace period to defer undergraduate loans. For Sallie Mae, if you want to fully defer undergraduate payments, you would have needed to select that option when you took out that loan.

Many students join the workforce, then return to graduate school. If you refinanced student loans while working, you may need to make payments during school.

Some refinance lenders offer in-school deferment, including SoFi, Earnest and CommonBond. But many others, such as College Ave, ELFI and Laurel Road, don’t offer this option.

Check with your lender for its policy. If an in-school deferment isn’t available and you know grad school is in your future, you may want to consider refinancing again before enrolling.

How to defer loans while in grad school

You can do the following to defer loans while in grad school:

  • Wait for your school. Your school will report your enrollment status to the government. If you’re eligible for an in-school deferment, you should automatically receive it for your undergraduate and graduate federal loans.

  • Apply with federal loan servicers. If you want a graduate fellowship deferment, submit the application to your federal loan servicer. If you don’t receive an in-school deferment — and believe you should have — you can also apply directly for one, but check with your school first.

  • Contact private lenders. You will need to request an academic deferment if you have private student loans. Ask your lender or private loan servicer about its process.

  • Opt for forbearance. If deferment isn’t available, you could postpone payments with forbearance. All loans accrue interest during forbearance. Private lenders also limit this option, often to 12 months. Use this benefit only if necessary; you may want to hang onto private loan forbearance in case you lose your job or face a different hardship.

Should you pay student loans during graduate school?

Depending on how much you get paid as a graduate student, money may be tight. But if you can afford to make full or interest-only payments during graduate school, you should.

There are no subsidized loans for graduate school, and grad students take out an average of $18,470 annually in federal loans, according to the most recent data from the College Board.

If you borrowed that much each year for a three-year graduate program, your loans would accrue more than $7,300 in interest by the end of your grace period. By letting that amount capitalize, or get added to your balance, the total you’d repay over 10 years would increase by almost $9,600.

Use this calculator to estimate how much interest your loans would accrue by not paying them during graduate school:

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