Parent PLUS Loan Deferment While in Graduate School

In this article we break down the process of applying for Parent PLUS loan deferment, how to apply and also eligibility requirements.

What is a Parent PLUS loan?

Parents have the option to obtain loans in addition to their children’s financial aid packages. The federal Parent Loan for Undergraduate Students (PLUS), which is offered through the Direct Loan Program, allows parents to borrow money to cover any remaining costs that are not already covered by the student’s financial aid package, up to the total cost of attendance. It is important to note that there is no cumulative limit for these loans.

It is important to understand that Parent PLUS loans are the financial responsibility of the parents, not the student. If the student agrees to make payments on the PLUS loan but fails to do so on time, the parents will be held accountable. In contemporary times, the PLUS loan is commonly referred to as either the Parent PLUS or Grad PLUS loan.

How to Defer Parent Plus Loans in Graduate School?

Deferring a Parent PLUS loan is a straight forward process to apply for a deferment on your Parent PLUS loans, you have the option to submit a Parent PLUS Borrower Deferment Request to the U.S. Department of Education. Once completed, you can then send it to your designated Parent PLUS Loan servicer. To locate your specific servicer, simply log in to your StudentAid.gov account.

Eligibility Requirements for Deferring Parent Plus Loans in Graduate School

These are important criteria you should meet to qualify for deferring Parent PLUS loans:

1. To qualify, you must be a parent borrower of a Direct or Federal PLUS Loan that was first disbursed on or after July 1, 2008.
2. The student on whose behalf you borrowed the PLUS Loan must be enrolled at least half time.

You may also defer repayment for the 6 months following the date that the student on whose behalf you
borrowed ceases to be enrolled at least half time.

Should you Defer your Student Loans?

There are several reasons why deferring student loans can be a wise choice for certain borrowers. Here are six factors to consider when contemplating deferring your student loans:

1. Financial Hardship: If you are facing financial difficulties, such as unemployment or a significant reduction in income, deferring your student loans can provide temporary relief by allowing you to postpone payments until your financial situation improves.
2. Returning to School: If you plan to pursue further education on at least a half-time basis, you may be eligible for deferment on your existing student loans. This allows you to concentrate on your studies without the added burden of loan payments.
3. Military Service: Active duty military members may qualify for deferment of their student loans during deployment periods or if they are engaged in qualifying service-related activities. This can offer financial flexibility while serving in the military.
4. Public Service: If you work in a qualifying public service job, such as government or nonprofit employment, you may be eligible for deferment or forgiveness of your student loans through programs like Public Service Loan Forgiveness (PSLF). Deferring payments while pursuing a public service career can help you maximize the benefits of these programs.
5. Health Issues: If you are temporarily disabled or facing a serious illness that prevents you from working or earning income, you may qualify for a deferment of your student loans. This can provide crucial financial relief during a challenging time.
6. Parental Leave: If you are taking time off work to care for a new child or support a family member during an illness, deferring your student loans can help alleviate financial strain while you are on parental leave.

Bottom Line

During the deferment period, interest may still accumulate, leading to a higher overall debt amount over time. Moreover, deferring payments can prolong the repayment period, resulting in increased total interest expenses. Prior to opting for deferment, it is advisable to explore alternative choices like income-driven repayment plans or loan consolidation to identify the most suitable solution for your financial circumstances.

Sources

1. https://finaid.org/loans/parentloan/
2. https://studentaid.gov/understand-aid/types/loans/plus/parent
3. https://www.american.edu/financialaid/parent-plus-loan.cfm