PLUS Loan Repayment
The repayment period for Federal Direct PLUS Loans begins on the day the loan is fully disbursed. Unless the parent borrower requests an in-school deferment, the first payment of interest and principal is due 60 days after the loan is fully disbursed. An in-school deferment allows repayment to begin six months after the dependent student on whose behalf the parent borrowed ceases to be enrolled on at least a half-time basis. Deferment of Federal Direct PLUS Loans is for principal only; interest continues to accrue and the borrower must pay all of the accrued interest on the loan after it is disbursed. Enrollment by the parent in a post-secondary school may, under certain conditions, also qualify the parent for a deferment of repayment.
Multiple repayment plans are available to Direct PLUS Loan borrowers, including the following:
Standard Repayment
With the standard plan, you will pay a fixed amount each month until your loans are paid in full. Your monthly payments will be at least $50, and you will have up to 10 years to repay the loans.
Extended Repayment
To be eligible for the extended plan, you must have more than $30,000 in Direct Loan debt and you must not have and outstanding balance on a Direct Loan as of October 7, 1998. Under the extended plan, you have 25 years for repayment and two payment options: fixed or graduated. Fixed payments are the same amount each month, as with the standard plan, while graduated payments start low and increase every two years, as with the graduated plan below.
Graduated Repayment
With this plan your payments start out low and increase every two years. The length of your repayment period will be up to ten years. If you expect your income to increase steadily over time, this plan may be right for you. Your monthly payment will never be less than the amount of interest that accrues between payments.
Estimate your monthly payment on each of the above plans.
Discharge/Cancellation
A parent PLUS loan can be discharged if you die, if you (not the student on whose behalf you obtained the loan) become totally and permanently disabled, or if your loan is discharged in bankruptcy. Your parent PLUS loan may also be discharged if the child for whom you borrowed dies.
In addition, all or a portion of a parent PLUS loan may be discharged if
- the student for whom you borrowed couldn’t complete their program because the school closed;
- your eligibility to receive the loan was falsely certified by the school;
- the student withdrew from school, but the school didn’t refund your loan money that it was required to pay under applicable laws and regulations;
- you reach 25 years in repayment on a Direct Consolidation Loan on the Income-Contingent Repayment (ICR) Plan; or
- you work in public service and apply for Public Service Loan Forgiveness (PSLF).
Note: Parent borrowers with unconsolidated Direct Loans or ED-held FFEL PLUS loans are eligible for the payment count adjustment, which provides additional credit for both IDR and PSLF.
Contact your loan servicer for more information.