Gap Years and COVID-19: What You Need to Know About Student Loans

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Taking a gap year off before starting college is becoming increasingly more common in the U.S. — especially with the coronavirus pandemic.

In fact, 40% of incoming freshmen now say they might take a gap year instead of going straight to college, according to a survey by SimpsonScarborough.

But if you’re thinking about taking a gap year, here’s what you should know first:

What is a gap year?
Student loans, financial aid, and gap years
Pros and cons of a gap year
How to pay for a gap year

What is a gap year?

A gap year is a planned year off from attending college — often between graduating high school and starting college, though it could be at any time during your education.

Generally, a gap year is meant to broaden your view of the world in some way as well as to let you rest before your next big academic push.

Keep in mind: While taking a year off to work or even relax might sound appealing, it’s a good idea to consider how you can enrich yourself during your time off from school.

For example, you could work an internship, volunteer, or learn a new language through an immersion program.

What should you do during a gap year?

While traveling is a popular way to spend a gap year, it’s not a viable option for everyone. It’s also understandably off the table for many students because of the coronavirus.

However, there are also gap year opportunities available right here in the U.S. through online programs. A few of these include:

Keep in mind that some programs might be limited or unavailable because of the pandemic.

Student loans, financial aid, and gap years

Depending on when you take your gap year, it could have very different impacts on your finances. Here’s how a gap year might affect you at each stage:

Before college

If you’re considering a gap year before you start college, it’s a good idea to talk to any colleges you might apply to first to see what their policies for gap year students are.

Keep in mind: In many cases, you can apply for college admission before you take your gap year. If you’re accepted, you’ll then apply for deferred status.

This will let you take advantage of all of the college admissions resources available to high school seniors while also securing your place at the college when you return.

Navigating your financial aid during a gap year could be a bit trickier. You might qualify for financial aid or even scholarships through your school, but these are often contingent on maintaining a certain number of credit hours — which you won’t be able to do if you’re taking time off for a gap year.

Be sure to speak to your school’s financial aid office to see what your options might be.

Learn More: Federal Student Loans and COVID-19: What You Need to Know

During college

If you’re already in college, you might have already used some federal financial aid or taken out college loans. Here’s how a gap year could affect your federal or private student loans:

Federal student loans generally come with a six-month grace period. While you might be able to take a semester off without worrying about making payments, taking a full year off might mean dipping into your grace period. If your grace period ends during your gap year, you’ll need to start making payments or see if you qualify for deferment or forbearance.
Private student loans sometimes come with a grace period, but not all do. You can check with your lender to see if you’ll need to start making payments during your gap year. Some lenders also offer deferment or forbearance if you’re having trouble with your payments — you can check with your lender to see what options might be available.

Keep in mind: Payments and interest have been suspended for most federal student loans by the CARES Act through at least June 30, 2023.

This coronavirus relief might make it easier for some borrowers to afford a gap year without having to worry about federal student loan payments for the time being.

Learn More:

Before grad school

You’ll also need to consider the grace periods on your student loans if you’re planning to take a break before attending graduate school.

This is especially true if you’ve already amassed a hefty amount of undergraduate debt or are going to attend an expensive career training program, such as law school, medical school, or business school.

If you’re wondering how long it’ll take to pay off your student loans, enter your current loan information into the calculator below to find out. Use the slider to see how increasing your payments can change the payoff date.

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Pros and cons of a gap year

Here are a few factors to consider when deciding whether to take a gap year or not:

Pros	Cons
Reduces academic burnout Lets you get a better sense of your career goals Opportunity to pick up new skills Could help you be more focused when you return	Could be costly (especially if you choose to travel) Might jeopardize certain financial aid Might cut into student loan grace periods

How to pay for a gap year

While a gap year could be costly depending on your plans, there are several ways to cover your living expenses. Here are a few options:

Scholarships and grants: There are certain scholarships and grants that can be used specifically to pay for a gap year. For example, Free to Roam Adventures offers need-based scholarships to help high seniors cover the cost of a gap year.
Get a job: Gap years also don’t have to be a round-the-world, jet-setting adventure — you can also earn an income while still doing meaningful work in your gap year. For example, you could sign up to teach English classes abroad or work in your hometown while doing an online program.
Take out a personal loan: A personal loan could help you manage your gap year expenses, though you’ll generally need good to excellent credit as well as verifiable income to be eligible. Some lenders allow cosigners on personal loans, which might help you get approved or could qualify you for a lower interest rate than you’d get on your own.
Refinance your student loans: If you refinance student loans, you might qualify for a lower interest rate or reduced monthly payment, which could reduce the strain on your budget. Keep in mind that if you refinance federal student loans, you’ll lose your federal student loan benefits — including access to income-driven repayment and student loan forgiveness programs.

If you decide to refinance your student loans, be sure to consider as many lenders as possible to find the right loan for you. Credible makes this easy — you can compare your prequalified rates from our partner lenders in the table below in two minutes.

Lender	Fixed rates from (APR)	Variable rates from (APR)	Loan terms (years)
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology. View details	4.4%+	4.99%+	5, 7, 10, 15, 20
Fixed APR: 4.4%+ Variable APR: 4.99%+ Min. credit score: 720 Loan amount: $10,000 to $400,000 Loan terms (years): 5, 7, 10, 15, 20 Repayment options: Military deferment, forbearance Fees: Late fee Discounts: Autopay Eligibility: Must have a credit score of at least 720, a minimum income of $60,000, and must be a resident of Texas Customer service: Email, phone Soft credit check: 720 Cosigner release: No Loan servicer: Firstmark Services Max. Undergraduate Loan Balance: $100,000 - $149,000 Max. Graduate Loan Balance: $200,000 - $400,000 Offers Parent PLUS Refinancing: Does not disclose
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology. View details	5.39%+¹	6.66%+¹	5, 7, 10, 15, 20
Fixed APR: 5.39%+¹ Variable APR: 6.66%+¹ Min. credit score: Does not disclose Loan amount: $10,000 to $750,000 Loan terms (years): 5, 7, 10, 15, 20 Repayment options: Immediate repayment, academic deferment, military deferment, forbearance, loans discharged upon death or disability Fees: Late fee Discounts: Autopay, loyalty Eligibility: Must be a U.S. citizen or permanent resident and have at least $10,000 in student loans Customer service: Email, phone, chat Soft credit check: Yes Cosigner release: After 24 to 36 months Loan servicer: Firstmark Services Max. Undergraduate Loan Balance: $100,000 to $149,000 Max. Graduate Loan Balance: Less than $150,000 Offers Parent PLUS Refinancing: Yes
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology. View details	5.99%+²	5.99%+²	5, 7, 10, 12, 15
Fixed APR: 5.99%+² Variable APR: 5.99%+² Min. credit score: Does not disclose Loan amount: $5,000 to $300,000 Loan terms (years): 5, 7, 10, 12, 15 Repayment options: Military deferment, forbearance, loans discharged upon death or disability Fees: Late fee Discounts: Autopay Eligibility: All states except for ME Customer service: Email, phone, chat Soft credit check: Yes Cosigner release: After 24 to 36 months Loan servicer: College Ave Servicing LLC Max. Undergraduate Loan Balance: $100,000 to $149,000 Max. Graduate Loan Balance: Less than $300,000 Offers Parent PLUS Refinancing: Yes
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology. View details	7.16%+⁵	7.71%+⁵	5, 10, 15, 20
Fixed APR: 7.16%+⁵ Variable APR: 7.71%+⁵ Min. credit score: 700 Loan amount: $7,500 to $200,000 Loan terms (years): 5, 10, 15, 20 Repayment options: Immediate repayment, academic deferment, forbearance, loans discharged upon death or disability Fees: None Discounts: Autopay Eligibility: Must be a U.S. citizen or permanent resident and submit two personal references Customer service: Email, phone Soft credit check: Yes Cosigner release: After 36 months Loan servicer: Granite State Management & Resources (GSM&R) Max. Undergraduate Loan Balance: $150,000 to $249,000 Max. Graduate Loan Balance: $150,000 to $199,000 Offers Parent PLUS Refinancing : Yes
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology. View details	5.08%+³	5.03%+³	5, 7, 10, 15, 20
Fixed APR: 5.08%+³ Variable APR: 5.03%+³ Min. credit score: 680 Loan amount: $10,000 to $250,000 Loan terms (years): 5, 7, 10, 15, 20 Repayment options: Forbearance Fees: None Discounts: None Eligibility: Must be a U.S. citizen or permanent resident, have at least $15,000 in student loan debt, and have a bachelor’s degree or higher from an approved school Customer service: Email, phone Soft credit check: Yes Cosigner release: No Loan servicer: Mohela Max. Undergraduate Loan Balance: $250,000 Max. Graduate Loan Balance: $250,000 Offers Parent PLUS Refinancing: Yes
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology. View details	5.61%+⁴	7.6%+⁴	5, 10, 15, 20
Fixed APR: 5.61%+⁴ Variable APR: 7.6%+⁴ Min. credit score: 670 Loan amount: $5,000 to $250,000 Loan terms (years): 5, 10, 15, 20 Repayment options: Academic deferment, military deferment, forbearance Fees: Late fee, returned payment fee Discounts: Autopay Eligibility: Must be U.S. citizen or permanent resident Customer service: Email, phone, chat Soft credit check: Yes Cosigner release: Yes Max undergraduate loan balance: $250,000 Max graduate loan balance: $250,000 Offers Parent PLUS refinancing: Yes
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology. View details	4.49%+	5.02%+	5, 7, 10, 15
Fixed APR: 4.49%+ Variable APR: 5.02%+ Min. credit score: 700 Loan amount: $5,000 to $300,000 Loan terms (years): 5, 7, 10, 15 Max. undergraduate Loan Balance: $125,000 Time to Fund: 10 to 30 days Repayment options: Immediate repayment, forbearance Fees: Late fee Discounts: Autopay Eligibility: Must be a U.S. citizen or permanent resident and have already graduated with at least an associate degree from an eligible institution Customer service: Email, phone Soft credit check: Yes Cosigner release: After 12 months Loan servicer: LendKey Technologies Inc. Max. graduate Loan Balance: $175,000 Credible Review: LendKey Student Loans review Offers Parent PLUS Refinancing: No
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology. View details	5.5%+	N/A	7, 10, 15
Fixed APR: 5.5%+ Variable APR: N/A Min. credit score: 670 Loan amount: $10,000 up to the total amount Loan terms (years): 7, 10, 15 Repayment options: Military deferment, loans discharged upon death or disability Fees: None Discounts: None Eligibility: Must be a U.S. citizen or permanent resident and have at least $10,000 in student loans Customer service: Email, phone Soft credit check: Yes Cosigner release: No Loan servicer: AES Max. Undergraduate Loan Balance: No maximum Max. Gradaute Loan Balance: No maximum Offers Parent PLUS Refinancing: Yes
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology. View details	5.79%+	N/A	5, 10, 15
Fixed APR: 5.79%+ Variable APR: N/A Min. credit score: 680 Loan amount: $7,500 to $250,000 Loan terms (years): 5, 10, 15 Repayment options: Academic deferment, military deferment, forbearance, loans discharged upon death or disability Fees: None Discounts: Autopay Eligibility: Available in all 50 states; must also have at least $7,500 in student loans and a minimum income of $40,000 Customer service: Email, phone Soft credit check: Does not disclose Cosigner release: No Loan servicer: Rhode Island Student Loan Authority Max. Undergraduate Loan Balance: $150,000 - $249,000 Max. Graduate Loan Balance: $200,000 - $249,000 Offers Parent PLUS Refinancing: Yes
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All APRs reflect autopay and loyalty discounts where available \| ¹Citizens Disclosures \| ²College Ave Disclosures \| ⁵EDvestinU Disclosures \| ³ ELFI Disclosures \| ⁴INvestEd Disclosures \| ⁷ISL Education Lending Disclosures \| ⁸Nelnet Bank Disclosures