While you are enrolled in school at least half-time, your Direct Loans will be placed into deferment, which means you don’t have to make any payments.

In addition, you don’t have to make payments during the 6-month grace period after you graduate or drop below half-time enrollment status.

Rates were the same for undergraduate, graduate, and professional students.

consolidating undergraduate and graduate student loans-76

Eligible undergraduates may receive subsidized interest loans.

Direct Loans, sometimes called Stafford Loans, are low-cost, fixed-rate federal student loans available to both undergraduate and graduate students.

Borrowers who have a pre-existing Citizens Bank account when they apply (co-signers’ accounts also qualify) can earn a 0.25% ‘Loyalty Discount’, and those who set up auto-pay get a 0.25% interest rate reduction You can’t refinance while you’re still in school: While you don’t need a degree in order to refinance with Citizens, you cannot do so if you’re still in school.

Some lenders will allow you to refinance before you graduate from school, meaning you’ll start saving on monthly payments and interest as soon as possible, but Citizens requires you to have graduated (or have stopped going to school) before you can refinance Fewer loan options than some newer lenders: Being an older, more established bank, Citizens doesn’t offer some features that some startup lenders have incorporated into their offerings.

If you don’t pay the interest as it accrues, it will be capitalized (added to the loan balance), increasing the size of the loan.

Before 2006-2007, interest rates on Stafford Loans (now known as Direct Loans) were variable, with different rates, depending on whether the borrower was in school, in the 6-month grace period after leaving school, or in the repayment period.

(In 1993-1994 and earlier award years, the interest rates were the same for the in-school, grace, and repayment periods.) Interest rates during the repayment period were 0.60% higher (see table).

At that time, borrowers could lock in their interest rate (rounded to the nearest 1/8th of a percentage point) by consolidating the loans.

Undergraduate students can take out federal student loans from the Direct Loans program.