Financial aid awards usually are made for the academic year. However, the actual money that pays for each semester's or quarter's courses is disbursed on a semesterly basis, or a quarterly basis if your college uses a quarter system. This means you can take a semester off with minimal financial aid consequences as long as you completed the previous semester in good standing, meaning you passed all the classes your financial aid paid for. After that, you need to re-enroll after your semester off to keep the student loan portion of your financial aid from going into repayment.
When you take a semester off from school, your student loans immediately fall into a grace period, a time when the lender won't send you a bill.
- Department of Education subsidized and unsubsidized loans have a six-month grace period.
- The Perkins loan has a nine-month grace period.
To avoid getting a student loan bill, the Department of Education advises you to officially re-enroll immediately after your semester off. Re-enrolling in school resets your grace period.
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To re-enroll and reapply for financial aid, visit the appropriate campus offices, which vary among colleges and universities. You may be able to complete the entire process online, depending on the institution. The campus administrators you'll need to meet with to re-enroll and reapply for financial aid include, but are not limited to:
- A financial aid counselor
- The college registrar
- The student affairs dean
- Your academic adviser
Pell Grant Eligibility
You can get Pell Grant funding for your undergraduate education for up to six years if you qualify, and those years don't have to be continuous. As a result, you won't lose your Pell Grant eligibility just because you take a semester off, as long as you finish the semester preceding your time off in good academic standing. What could change your Pell Grant eligibility is a change in your financial profile, which could improve during your semester off.
Loan Repayment Options
If circumstances prevent you from re-enrolling in school and you can't repay your student loan after the grace period ends, you have some options. Your student loan servicer may offer:
- Deferment, which delays student loan repayment under certain circumstances, such as entering into active military duty, entering the Peace Corp or prolonged unemployment.
- Forbearance, which pauses your student loan payments up to one year due to financial hardship, examples of which might include joblessness or illness.
The most significant difference between deferment and forbearance is that with deferment, interest does not accumulate -- or the government may pay it for you -- and with forbearance, it does accumulate. In all cases of repayment hardship, communicate with your student loan servicer to reach a workable solution.