Here's how the math works: The average college graduate in 2016 has $37,000 in student-loan debt, according to estimates by Cappex.com, a college and scholarship search site. Let's assume those loans are federal student loans. In fact, about 90 percent of student loans these days are provided by the federal government. The interest rate for federal direct student loans for undergraduates disbursed in the 2015-16 academic year was 4.29 percent.
So for a $37,000 loan at 4.29 percent, the interest accrued during the grace period is $794. That would grow the total loan balance to $37,794. Under the standard 10-year repayment plan, the grace period raises the monthly payment from $380 to $388, and the total cost of the loan by $981.
The costs of a grace period vary depending on the interest rate and the loan amount. Take the typical grad student. The average graduate school student has $57,600 in student-loan debt, according to New America, a nonpartisan public policy institute.
If that hypothetical student borrowed using a federal direct loan for graduate school, which had a rate of 5.84 percent last academic year, she would have accrued $1,682 in interest during the grace period. That extra interest would increase the monthly payments from $635 to $653, and the total cost of the loan would rise by $2,225.
Grace-period costs may be steeper at private lenders. For example, the average rate for a private student loan from Sallie Mae, the largest private student-loan lender, was 7.93 percent last year. Sallie Mae offers a free calculator to help borrowers determine how much interest accrues during their grace periods.
Interest doesn't accrue during the grace period for federal student loans provided to students in financial need, such as subsidized direct loans and Perkins Loans.