What Types of Repayment Plans Are Available for Parent Loans? | Private Student Loans

For Parent Loans, Earnest offers two options for repayment plans.

• Interest-only: While in school and for nine months following graduation, you’ll make monthly payments to satisfy the interest that will accrue between payments. Nine months following your student’s graduation, the full minimum monthly payment will become due.
• Full payment: While in school and following graduation, the full minimum monthly payment will be due. This option will enable you to accrue the least amount of interest over the life of the loan.

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 your interest 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:

1. To keep the loan in partial payment status while attending school, your student is required to be enrolled at least half-time, without interruption, until the date of their graduation.
2. If your student’s school reports to us that they are enrolled less than half-time, or provides a last date of attendance, your loan will immediately enter the nine-month grace period. This is the nine months following graduation, when you continue to make the same payments made while your student was in school. Full repayment will begin once your grace period ends.
3. If the student leaves their program without completing a degree, their loan will enter a nine-month grace period. Once the grace period ends, full repayment will immediately begin.

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.