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Parent PLUS Loan Deferment: What It Is and How to Pause Payments

Parent PLUS Loans are education loans that help you pay for your child’s school costs. When you get a Parent PLUS Loan, you’re assigned a loan servicer and must start making monthly payments immediately.

Even though the loan is for your child’s education, you’re taking on the debt as your own. The loan is in your name, and you — not your student — are responsible for repaying the debt.

If you’re considering borrowing a Parent PLUS Loan or already have one, learn how to defer payments or access various repayment options, if needed.

When do Parent PLUS Loan payments start?

Generally, your first payment for a Parent PLUS Loan is due once the loan is completely paid out. As with other types of federal financial aid, there are usually two disbursements for Parent PLUS Loans. 

The first disbursement is usually in the fall academic season, and the second is in the following spring. As a result, there’s a good chance your scheduled loan repayment will start during, or after, the spring semester.

Can you defer Parent PLUS Loans?

Yes, a Direct PLUS Loan for parents allows repayment deferment. Forbearance is also possible on Parent PLUS Loans. Generally, forbearance is requested when you experience a short-term financial hardship and can’t make your student loan payment.  Interest accrues while the forbearance lasts, and you’re expected to begin making payments at the end of the period.

Loan deferment is sometimes the result of choosing to hold off on making payments until after your child is no longer attending school at half- or full-time enrollment. This is called in-school deferment. You can also access a six-month grace period starting from the official date your child dropped below half-time enrollment. 

While some federal student loans don’t accrue interest during deferment, Parent PLUS Loans don’t have that benefit. No matter the situation, interest continues accruing on Parent PLUS Loans, whether you enroll in deferment or forbearance to put off making your payments immediately.

How to qualify for Parent PLUS Loan deferment

There are two main ways to qualify for Parent PLUS Loan deferment:

  • While your student is enrolled in college. Your undergraduate student must be enrolled at least half-time in school. You can also seek deferment for the six months after the child graduates or drops below half-time enrollment.
  • When you’re a student enrolled at least half-time. If you enroll in school, even if you get other federal student aid, you can put off making payments on your federal Parent PLUS Loans and other Direct Loans. 

Usually, you’ll need to apply for Parent PLUS deferment. You can do this when you submit information to your child’s school as part of filling out the Free Application for Federal Student Aid (FAFSA). Additionally, you can fill out a separate application on StudentAid.gov.

What happens when loans are put in deferment?

Once the loans are disbursed, they begin accruing interest. During deferment, interest continues to accumulate on the loan. After the grace period, the accrued interest is added to the loan balance if interest-only payments weren’t made while loans were deferred. When entering repayment, you might see a higher total balance and make payments on that higher amount.

You can choose to make interest payments while your loans are in deferment to avoid having the accrued interest capitalized on your loan account.

Why parents might want to defer payments

It might make sense to defer student loan payments on debt related to your child’s education, depending on your situation.

For example, you may be planning to go back to school or working on repaying your own student debt. In these situations, you might not have the money to make PLUS Loan payments right now. It might make sense to defer until more money is available to handle additional loan payment amounts.

Parent PLUS Loan borrowers can choose to also defer payments until they can consolidate them into other loans. The double-consolidation loophole that’s available until 2025, lets you access a Direct Consolidation Loan which qualifies for valuable federal programs. 

Programs that can be unlocked through this method include loan forgiveness programs, like Public Service Loan Forgiveness (PSLF) and income-driven repayment plans (IDR plans) beyond income-contingent repayment (ICR).

How to defer Parent PLUS Loans

Realize that Parent PLUS Loans aren’t automatically deferred, like other types of student loans. You have to request a deferment. Here’s how to do it:

  1. Complete the Parent PLUS Borrower Deferment Request provided by the U.S. Department of Education.
  2. Send the completed form to your Parent PLUS Loan servicer. You can find your servicer by logging in to your StudentAid.gov account.
  3. Check with your child’s school to determine if you can submit your deferment request while filling out a Direct PLUS Loan Request.

Deferment alternatives for parent borrowers

Just because you can defer doesn’t mean it’s a good option for you. Depending on your and your student’s situation, there might be other choices, especially if your personal finances need relief from Parent PLUS Loan payments.

Change your repayment plan

Currently, ICR is the only IDR plan available to Parent PLUS borrowers. However, it requires the highest monthly payment compared to other IDR options.

You expand your access to other IDR plans and repayment terms through a process through a loophole known as double-consolidation. This strategy unlocks the valuable Saving on a Valuable Education (SAVE) Plan that was introduced by the Biden administration in 2023.

There’s a limited window to take advantage of double-consolidation, though. The loophole closes in 2025, so if you plan on moving forward, it’s a good idea to start the process ASAP.

You can also opt for an extended or a graduated repayment plan to spread your payments for longer. However, you’ll likely pay more interest over time.

Shift the loan payments to your child

Ask your student to make Parent PLUS payments. You’re still legally responsible for the loan, but you can make arrangements with them so they cover the loan payments. This can be an option if your child can reasonably afford to make some payments, and you want to exhaust federal options instead of turning to private student loans.

Another option is to refinance the PLUS Loan to your child so the account is under their name. Since this process converts the loan to a private student loan, you’ll lose access to federal programs and benefits.

Refinance in your name

Finally, you can also refinance the debt in your own name to pay off your Parent PLUS Loans. If you do this instead of taking advantage of federal consolidation, you’ll lose access to the benefits of Direct Consolidation Loans. 

Generally, refinancing in your own name can be an option if your hardship in making payments is a short-term issue. Additionally, if you have strong credit that qualifies for a lower interest rate. 

Carefully review your options, including using our Parent PLUS calculator. If you’re still unclear about the best step forward, chat with one of our student loan experts. We help you create an actionable plan for managing your student loans in the short- and long-term.

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