For Parent Loans, Earnest offers two repayment plan options:
Interest-only: You will only be required to make interest-only payments while your student is enrolled and for 9 months following graduation. After this grace period or if the student drops to a less than half-time status, the full minimum monthly principal and interest payment will become due.
Full Repayment: For the life of the loan, including while the student is in school, the full minimum monthly principal and interest payment will be due. This option will enable you to accrue the least amount of interest over the life of the loan and will not include a nine-month grace period.
When deciding which repayment option is right for you, it’s important to consider what financial commitment you will be able to meet while your student is in school. Applicants with limited savings and other financial obligations may prefer the interest-only plan, while those with stronger savings and a good source of income generally find the full repayment option works best. When deciding between the options, you may find that a budgeting tool could help with planning. Please keep in mind that you can always pay more than the minimum amount due. There are no fees or penalties for early repayment, and doing so can reduce the interest accrued and lower your total finance charge.
If you choose interest-only, you are eligible for a nine-month grace period following your student’s graduation. To be eligible for the grace period, it’s important to keep a few things in mind:
- To keep the loan in partial payment status while attending school, your student must be enrolled at least half-time, without interruption, until the date of their graduation.
- If your student’s school reports to us that they are enrolled less than half-time, provides a last date of attendance, or the student leaves their program without completing a degree, your loan will immediately enter the nine-month grace period. Full repayment will begin once the grace period ends.
We hope this information helps! If you have any further questions, feel free to contact our team by clicking on the “Get In Touch” button at the bottom of this article.