For Parent Loans, Earnest offers two options for repayment plans.
- Interest-only: While in school and for 9 months following graduation, you’ll make monthly payments to satisfy the interest that will accrue between payments. 9 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. Clients with little savings and other financial obligations find the interest-only plan a good option. While clients with savings and a good source of income generally find that the full repayment option works best for them. 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, and there are no fees or prepayment penalties for doing so.
If you choose interest-only, you are eligible for a 9-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 is required to 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, or provides a last date of attendance, your loan will immediately enter the 9-month grace period. This is the 9 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.
- If the student leaves their program without completing a degree, your loan will enter the 9-month grace period. Full repayment will immediately begin once your 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.