How long is Grace period for Direct loans & FFEL Program loans?

The grace period always begins on any of the three dates.

  • When the borrower completes the program.
  • Sixty days after completing the school’s deadline for the program.
  • If the borrower is 60 days behind the due date for scheduled assignment submission.

What is a Grace Period?

A Grace period is a certain amount of time allotted to borrowers or insurance holders due for payment. When a grace period is ongoing, there is no late fee to be paid. The delay cannot extend beyond a certain span. The delay does not mean a default or loan cancellation or contract offer, it is simply a void period which is given to any customer who is unable to pay the loan back due to some unforeseen circumstances. A grace period does not stamp you with a black mark on the borrower’s credit report. Also, those who wish to pay back within the grace period, they can do so, in the same manner, and they would have paid back the loan before the grace period began. Additionally, every loan that offers a grace period often marks the grace period time range in their application.

What is the difference between Direct Loans and FFEL program?

The difference between Direct loans and the FFEL program are many;

  1. There are different delivery systems for the money- William D Ford Federal Direct Loans (Direct Loans) and the Federal Family Eligibility Loan (FFEL).
  2. Direct loans are directly sent to the Federal Program while FFEL funds are given by a money lender and the state agency guarantees the issuance of the fund. Direct loans are sent to the educational institution and the FFEL loans are directly given to the loan holder.
  3. The loans available through the Direct Loans and the FFEL programs are almost the same- subsidized & unsubsidized Stafford loans, PLUS and consolidation loans.

Can Direct Loans and FFEL programs be forgiven?

Direct Loans and FFEL loan programs are forgiven under the current Biden administration led loan forgiveness offering made to new and old students alike. Nearly every type of loans is forgiven and that includes different types of direct loans including subsidized and unsubsidized loans, graduate and even Parent PLUS loans. Even though FFEL program loans are given by private lenders, yet, they are forgiven as they have a state agency issuance guarantee tagged with it.

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How long is the grace period for Direct Loans?

No matter which loan type you borrowed from them- subsidized, unsubsidized, Stafford, and Direct loans, they all have a Federal loan grace period. A six-month grace period is what is given to every student who takes that loan. In all types of the grace period, once it lapses, you will not get a renewed grace period.

However, the good news is that if you have interrupted the initial grace period by any of the three means-

  • Going back to school
  • Proceed with the enrollment in a qualifying study course and if you gain enough units to maintain a half-time status, you can get another six months. But you must remember to file the grace period allotment with the correct student deferment unit.
  • If you do not interrupt the grace period, you will not get another even if it means financial hardship or unemployment.
  • There can be a forbearance period when a person can stop paying the loan, however, at the end of the forbearance period, there is no additional grace period allotment.

How long is the grace period for FFEL program loans?

The grace period for the FFEL program loans includes the same 6-month window. When the Federal loan grace period for FFEL loans is given for a single term, they can’t be increased in any way and only one grace period is offered.

FAQs (Frequently Asked Questions)

Do FFEL loans qualify for a grace period?

Yes, FFEL loans qualify for a grace period and there is a 6-month grace for both the Direct loans and the FFEL loans.

What happens if you are unable to pay the FFEL loans after grace period?

More interest keeps accruing on the loan you have taken. If you wish to defer it, you might wish to join the school back. After 25 years if you are unable to pay the rest of the loan, you will be forgiven.

What can you do during a grace period?

Most often students can use the grace period to find a job for themselves or in setting up a business that can grow for the next 6 months for establishments.


The Federal loan grace period is like a golden opportunity and a lot can change during this period. People get jobs or get financial help and there is some way people can start with their loan payments. Try to find the best ways in which you can pay your loans back. Find out your grace period by finding out the essential parameters of your loan. Also, initiate the repayment to develop the best path for yourself.

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