JB Pritzker, Governor, State of Illinois

Steps for Conversion to Repayment

Following is a summary of the steps involved in the repayment process.

Federal Stafford Loans

Step 1: Student Drops Below Half-Time Enrollment 

The loan enters the grace period prior to repayment status when the student drops below half-time enrollment by:

  • graduating,
  • withdrawing,
  • not taking enough classes, or
  • not satisfactorily completing enough classes.

Step 2: Borrower Completes Exit Counseling

Students are required to complete an exit interview with the school when the student's enrollment drops to below half time. Many schools utilize Mapping Your Future for fulfilling this requirement.

Step 3: Grace Period Begins

Before the first loan payment is due, the student is given time to find a job and get their finances together. This is referred to as the grace period. The grace period:

  • begins the day the student drops below half-time enrollment status,
  • lasts six months, and
  • is available to subsidized and unsubsidized Federal Stafford loan borrowers.

Step 4: Repayment Terms Are Established

A variety of repayment options are available to borrowers when a loan enters repayment status. Once the repayment option is selected and shortly before the borrower's grace period ends, the lender must disclose the repayment terms to the borrower. The repayment schedule discloses how much the student owes, the amount of interest the student will pay during the repayment period, the amount of the monthly payment, when payments are due, and how long it will take to pay the loan in full.

Federal PLUS Loan

For Federal PLUS loan borrowers, the first payment is due within 60 days of the final disbursement of the loan, unless a deferment is obtained. There are certain times when the borrower may qualify for a deferment of payment of principal. The PLUS borrower is always responsible for the payment of the interest.