Parent PLUS Loan Deferment: Do You Have to Pay Right Away?

If you took out a federal parent PLUS loan for your child’s education, you can defer — or postpone — payments up until six months after your child graduates or drops below half-time enrollment.

Interest will accrue on the loan during a deferment. That interest will be capitalized, or added to your balance, when you start repaying parent PLUS loans, increasing the amount you repay.

When does parent PLUS loan repayment begin?

Your first payment on a parent PLUS loan is due once the loan is fully paid out. Federal student loans usually have two disbursements — one for each college semester — so you would likely start paying back PLUS loans after the spring semester.

Deferment means you can opt to postpone repayment while your child is enrolled at least half-time at an eligible school. The loan deferment also lasts six months after your child finishes school or drops below half-time enrollment, mirroring the grace period for other undergraduate student loans.

But unlike the grace period for undergraduate loans, parent PLUS loan deferment doesn’t happen automatically.

If you want deferment, you must complete an application and submit it to your loan servicer. You may also be able to opt into parent PLUS loan deferment when applying for the loan, depending on the school’s procedures.

Parent PLUS loan deferment for hardship

You may also qualify for PLUS loan deferment under certain circumstances — if you're unemployed or face financial hardship, for example. Parent PLUS loans are eligible for the same student loan deferments as other federal loans.

Parent PLUS loans are also eligible for forbearance. You always pay the interest that accrues on PLUS loans during deferment or forbearance.

» MORE: Deferment vs. forbearance: Which is right for you?

Parent PLUS loan deferment eligibility

To qualify for parent PLUS loan deferment, you and the student on whose behalf you borrowed will need to meet the following criteria:

• The student must be enrolled at least half-time.

• The student must attend an eligible institution.

Consider options besides deferment

Just because you can defer parent PLUS loan payments doesn’t mean you should — especially considering the extra costs.

When taking out parent loans, aim to minimize how much you pay overall. That could mean paying the interest while your child is in school or refinancing PLUS loans right away. If you can’t afford monthly payments, consider enrolling in the Income-Contingent Repayment plan, which caps monthly payments at 20% of your discretionary income.