If I take a gap year, what happens with student loans? Do they get deferred or do I still have to start paying them back right after high school? I'm trying to figure out the financial implications of taking a year off.
If you've already borrowed student loans and you're considering taking a gap year, it's important to understand how this might potentially affect your repayment terms.
Let's start with the basics. After you've completed high school, if you're not enrolled at least half-time in an accredited post-secondary institution (i.e., a college or university), your student loans will typically enter a repayment period. If you do take a gap year, this will likely start the clock on your loan repayment.
That said, there are options to manage loan repayments during a gap year. Here are some possibilities:
Deferment: You could qualify for an in-school deferment if you have enrolled in college but haven't started classes yet. Deferment will postpone your loan payments.
Forbearance: You may also qualify for a discretionary forbearance, which can temporarily stop loan payments or lower the loan amounts. But, interest will still accrue during this period.
If you take a gap year before enrolling in higher education, it's best to contact your loan servicer directly and discuss your options. It's important to remember that even with options like deferment or forbearance, the interest might still be accruing and will add up over time.
On the other hand, if you have not yet taken out any student loans, you should not have any concerns regarding a gap year's impact on student loan repayment. You will only start repaying student loans after your higher education starts and you have taken out the loans.
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