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If you took out a federal parent PLUS loan for your child’s education, you don’t have to start paying it back right away. Parent PLUS loan deferment is available up until six months after your child graduates or drops below half-time enrollment.
Interest will accrue on the loans 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 do you start paying back parent PLUS loans?
Your first payment on a parent PLUS loan will be 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.
You can opt to defer parent PLUS loan payments 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 a parent PLUS loan deferment when applying for the loan, depending on the school’s procedures.
Consider options besides deferment
Just because you can defer parent PLUS loan payments doesn’t mean you should — especially considering the extra costs.
The average parent PLUS loan is roughly $29,000, according to federal data as of March 2023. At current interest rates, waiting four years to start repayment would add $9,338 in interest to that balance.
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 pay parent PLUS loans, enrolling in the Income-Contingent Repayment plan should provide a more manageable payment.
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