8 things you should do before your student loan grace period ends

By Carolyn Morris | Published on October 21, 2025

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Most education loans come with a six-month deferment period — which means you don’t have to make any student loan payments until six months after you graduate. Called a “student loan grace period,” this window of time allows borrowers some breathing room between finishing school (or dropping below half-time enrollment) and making loan payments¹.

Earnest private student loans come with a nine-month grace period (three months longer than the industry average)², giving borrowers even more time to get on their feet after leaving school. But no matter how long your grace period is, it’s critical to use this time wisely.

The grace period is an opportunity to get your personal finances in order before those monthly payments start carving out a chunk of your monthly budget. Here are eight things to do to set yourself up for success before your student loan grace period ends.

Make a list of all your private and federal student loans

You could have more than a dozen federal loans or private loans, so start by getting organized. List all of your loan details in one place, including principal balance, interest rate, loan term, first payment deadline, servicer, payment, and respective customer service contact information.

Confirm which loans come with a grace period and how long that grace period is.

Graduates can also use the National Student Loan Data System (NSLDS) or log into the Department of Education’s studentaid.gov website to track down all their federal student loans and corresponding student loan servicers.

If you also have private student loans, those will be listed on your credit report. You can pull your report once per year for free through annualcreditreport.com. Keep in mind that your lender might not be the same as your loan servicer. You can typically log into your private loan account or reach out to your private lender to determine your loan servicer if you can’t figure it out from your credit report.

Make a loan repayment plan

Next, figure out what your monthly minimum(s) are. If you don’t already know, use a loan calculator to find out.

During your grace period, you’ll also be able to choose a repayment plan for your federal loans. Borrowers who don’t make a specific selection will default to the standard 10-year plan with a fixed payment amount. If monthly payments on the standard plan are too high for what your budget can handle, you may be able to select a graduated repayment plan. With this kind of plan, your payments start low and gradually increase over time. You may also be able to select an extended repayment term, which can be up to 25 years. With an extended term, payment amounts can be fixed or graduated. (If you are also hoping to work toward loan forgiveness, contact your federal student loan servicer to learn more about those requirements before you select a plan.)

Consider choosing the plan with the highest monthly payment your budget will allow. This will minimize the interest payments you’ll have to make towards your total loan balance, saving you money in the long run.

Calculate the savings from bonus payments

If your budget has any wiggle room once you’ve selected a plan, you can also make occasional payments above the monthly minimum. This will help you save even more in interest and could help you pay off your loans early.

Use our refinancing calculator to figure out the total amount of interest you’ll pay over the life of the loan, assuming you make the minimum payments. Then, go back and increase the monthly payment input, and take note of how both your total interest and loan term decrease. In the future, use these calculations as a reminder that putting your spare dollars towards loan payments can really make a difference.

Sign up for automatic billing

It’s a good idea to sign up for automatic payments before your student loan grace period ends. Many private student loan servicers — including Earnest — award a 0.25% interest rate discount³ to all borrowers who sign up for Auto Pay. This can translate to significant savings over the life of your loan.

Automatic payments will also ensure that you never miss a bill’s due date by accident. While Earnest never charges fees of any kind, many private lenders⁴ will slam you with late fees for missed payments. Making on-time payments is also the key to building your credit score, which can help you qualify for other types of credit (like a home loan) in the future.

Consider getting a head start on your payments

If you have only subsidized student loans (which you’ll know from your above homework), then you can skip this one. But if your loans are unsubsidized — true of some federal undergraduate loans, all federal graduate loans, Parent PLUS Loans, and all private student loans — it’s worth trying to start making payments before the grace period ends.

Interest on unsubsidized loans accrues even when you aren’t making payments, and it gets capitalized at the end of your grace period. In other words, it gets added to your principal — which means you’ll have to pay interest on a higher amount going forward. Paying off any outstanding interest before your grace period ends will give you the chance to nip this in the bud, prevent capitalization, and save money on your loans.

If you have both subsidized and unsubsidized loans, you can always make payments only on your unsubsidized loans now, and then wait until your grace period is over to make payments on subsidized loans.

Don’t want to start paying off your loans early? In that case, it’s a good idea to start saving extra cash so you can make your first payments as painless as possible.

Leverage job benefits

Ask if your current or future employer has a student loan repayment assistance program. This is an employee benefit offered by some companies. If you’re still looking for the right role, consider taking on a side gig. Part-time work can be a good way to stay in the black while you’re job hunting. Side gigs can also be a good source of bonus income to put toward your student loans even after you start working full-time.

Research potential student loan relief programs

If you know you aren’t able to make your payments once your grace period ends, you still have a few options to avoid going into student loan default:

• Apply for deferment: Deferment is available from the federal government as well as from some private lenders. During deferment periods, you don’t have to make payments, and interest typically does not accrue. However, the rules for deferment are quite strict. You’ll need to reach out to your loan servicer and fill out an application.

• Apply for forbearance: Your federal loans may qualify for forbearance. During forbearance periods, you don’t have to make payments but interest will accrue.

• Consolidate your federal loans: Student loan consolidation can be a good option for graduates who have federal loans and for whom making multiple payments is stressful. Consolidating your loans allows you to retain the borrower protections of federal student loans, including access to loan forgiveness, but gives you the opportunity to extend your loan term and lower your monthly payment.

• Enroll in an income-driven repayment (IDR) plan*: When you consolidate your federal loans, you’ll have the opportunity to select a new repayment plan. An IDR plan will cap your monthly payment at a percentage of your discretionary income, keeping your loan bills affordable.

* As a result of ongoing court actions, the terms of some Income-Driven Repayment (IDR) plans, including the SAVE plan, may be subject to change. Please refer to studentaid.gov for the current status of these plans.

• Reach out to your lender: If you have private student loans and can’t make your payments, reach out to your lender to explain your situation. They might be able to work with you on a solution.

Consider refinancing your student loans

Whether you’re struggling to make your first payments or simply want to get out of debt faster, refinancing could be a great solution. Refinancing can help you both extend your loan term and lower your interest rate. If you qualify for a lower interest rate, it can reduce what you’ll pay in total interest⁵.

Student loan refinancing is worth looking into if you have a good credit score, a steady job, and can show that you have the means to meet monthly payments. If you plan to take advantage of government programs such as income-based repayment, however, refinancing may not be a good fit, as it’ll cause you to lose these benefits.

If you’re still building up your credit, now is the time to think about whether refinancing might be a money-saver in the future. Set a calendar reminder for one year from now — or for when you expect you might get a raise — to re-evaluate your financial profile and consider whether it’s a good time to refinance.

If you’re ready to explore the benefits now, start by shopping around. Look for lenders who can offer low rates, low to no fees, and outstanding customer service. Earnest, for example, never charges any origination fees or prepayment penalties, and offers some of the best rates in the business. See for yourself with our free rate-checker tool. Input just a few personal details and see how much you could save.

About the Author

Carolyn Morris

Carolyn is a content marketer and editor who specializes in financial services. With over a decade of experience in the financial services industry, Carolyn has a passion for demystifying the loan application and repayment process for students and their families.

Disclaimer

Disclaimer: This blog post provides personal finance educational information, and it is not intended to provide legal, financial, or tax advice.

1 As was announced by the U.S. Department of Education (ED), federal student loans have resumed accruing interest starting September 1, 2023, and federal student loan payments were reinstated starting in October 2023. Please note that you will lose benefits associated with your underlying federal loans, such as federal Income-driven Repayment Plans (an example of which is the SAVE plan), Economic Hardship Deferment, Public Service Loan Forgiveness, or other deferment and forbearance options, if you refinance into a private loan. If you file for bankruptcy, you may still be required to pay back this loan. See https://studentaid.gov/ for more information.

2 Nine-month grace period is not available for borrowers who choose our Principal and Interest Repayment plan while in school.

3 You can take advantage of the Auto Pay interest rate reduction by setting up and maintaining active and automatic ACH withdrawal of your loan payment from a checking or savings account. The interest rate reduction for Auto Pay will be available only while your loan is enrolled in Auto Pay. Interest rate incentives for utilizing Auto Pay may not be combined with certain private student loan repayment programs that also offer an interest rate reduction. For multi-party loans, only one party may enroll in Auto Pay. FOR SLO ONLY - It is important to note that the 0.25% Auto Pay discount is not available while loan payments are deferred.

4 Before applying for private student loans, it’s best to maximize your other sources of financial aid first. It’s recommended to use a 3-step approach to assembling the funds you need: 1) Look for funds you don’t have to pay back, like scholarships, grants, and work-study opportunities. 2) Next, fill out a FAFSA(R) form to apply for federal student loans. Federal Direct subsidized and unsubsidized loans, excluding PLUS Loan for Parents and PLUS Loan for Graduate and Professional Students which require a credit check and a credit worthy endorser if the parent or graduate or professional student has adverse credit, do not require a credit check or cosigner, and offer various protections if you're struggling with your payments. 3) Finally, consider a private student loan to cover any difference between your total cost of attendance and the amount not covered in steps 1 and 2. For more information, visit the Department of Education website at https://studentaid.gov/.

5 Choosing to refinance to a longer term may lower your monthly payment, but increase the amount of interest you may pay. Choosing to refinance to a shorter term may increase your monthly payment, but lower the amount of interest you may pay. Review your loan documentation for the total cost of your refinanced loan.