How a Leave of Absence Affects Your Student Loan Grace Period and Aid Eligibility

When the Grace Period Actually Starts

Your grace period begins the day you stop attending classes, drop below half-time enrollment, or graduate, not the day you decide to take time off. For Direct Subsidized Loans and Direct Unsubsidized Loans, you get six months before your first payment comes due, according to Federal Student Aid's servicer guidance . Direct PLUS Loans don't have a formal grace period, but Grad PLUS borrowers get an automatic six-month post-enrollment deferment before the first payment is due, and Parent PLUS borrowers can request the same. Interest keeps accruing during that window, unlike with subsidized loans, so the balance grows even though payments aren't due yet.

You only get one grace period per loan. If you use it, return to school, then leave again, that second departure does not reset a fresh six-month window on the same loan. You go straight into repayment or need a deferment.

How an Approved Leave of Absence Changes This

A formal leave of absence, approved in writing by your school before you stop attending, keeps you classified as an enrolled student for federal loan purposes as long as it does not run past 180 days in any 12-month period. Under 34 CFR 668.22 , a leave inside that window does not count as a withdrawal, so your grace period does not start and no loan funds get returned by your school.

Cross that 180-day line, or take leave without your school's approval, and the rule flips. The school must treat you as withdrawn as of your last date of attendance. That triggers a Return of Title IV Funds calculation, which can send part of your grant or loan money back to the government, and it starts your grace period clock from that withdrawal date, under the 2025-2026 Federal Student Aid Handbook .

What This Means in Practice

If your grace period starts while you are still off campus and it runs out before you return, you enter repayment on schedule even though you are not enrolled. Contact your loan servicer before that happens to request a deferment or forbearance so payments do not come due while you have no income tied to your studies.

Aid Eligibility When You Come Back

Returning after a leave does not require a new FAFSA if your leave falls inside the same aid year, but confirm your enrollment status was updated correctly with the registrar so financial aid disburses on the right schedule. File a new FAFSA for any award year your return crosses into, since aid does not carry over automatically between academic years.

Ask your financial aid office how the gap affects Satisfactory Academic Progress review. Some schools pause the SAP clock during an approved leave, while others still count the elapsed time toward your maximum timeframe to finish the degree.

Loans Taken Out After July 2026

The 2025 reconciliation law changed federal borrowing going forward, ending Grad PLUS loans for new borrowers after July 1 2026 and replacing the SAVE repayment plan with a new Repayment Assistance Plan. If you take out new loans after that date, do not assume older repayment or forgiveness terms apply. Check your loan type and disbursement date on studentaid.gov before making leave or repayment decisions.