Grace Period Interest

[East coast]

Couldn't find this anywhere on the web, so hoping someone may be able to point me in the right direction. If going with REPAYE for federal student loans and assuming the loans are eligible to accrue interest during the grace period - does the interest subsidy apply during the grace period?

in other words, if theoretically no payments are made in the grace period, will the effective interest rate get cut in half for the duration of the period?

[jhwkr542]

Someone might have to correct me but not unless you consolidate them. You can't waive your grace period with direct loans. If you want the subsidy immediately after graduating, then you have to consolidate and then go for repaye. I'd only recommend this if you're going for pslf. Otherwise, if you want a lower interest rate, you might want to consider refinancing.

[mamead]

I think that because you are in the grace period (and not required to make any payments), your interest continues to accrue at the set rates, just as they are while you are in medical school. You do not enter repayment until after your grace period has ended, and cannot terminate your grace period early just because you make payments during this time. Choosing IBR (or any other repayment plan) has no effect on this.  Also, any payments during your grace period do not count as one of your 120 (or 240/whatever number of necessary payments needed for loan forgiveness) since they are not required payments.