Federal PLUS Loan Review

Financial

Borrowers must not have adverse credit history due to a previous student loan default, bankruptcy or other negative mark on their credit report.

If you have adverse credit, you can still get a PLUS loan if you complete PLUS Credit Counseling and either appeal the decision or apply with a co-signer who doesn't have adverse credit.

Other

• Citizenship: U.S. citizens and eligible noncitizens.

• DACA borrowers: Not eligible..

• Location: Available in all 50 U.S. states.

• Must be enrolled half-time or more: Must be enrolled half-time or full-time.

• Loan can be used for past due tuition: Yes.

• Types of schools served: Any school authorized to receive federal aid.

Many lenders are offering relief related to COVID-19. Check our student loan relief guide to see what the federal government offers.

In-school repayment options

Graduate PLUS loan payments are automatically deferred while borrowers are enrolled at least half-time in school and for the six-month grace period after leaving school.

Parent PLUS borrowers can request a similar deferment; otherwise, repayment begins within 60 days of when the loan is fully disbursed.

There is no penalty for making payments on any PLUS loan while in school, so you may opt to make immediate or interest-only payments to reduce your debt if you opt for a deferment.

Post-school repayment options

Borrowers are automatically enrolled in the standard 10-year repayment plan. To change your repayment plan, you must contact your loan servicer. You can use the federal student aid office’s Loan Simulator to find out which plans you might be eligible for and to get monthly and overall payment estimates. While graduate PLUS borrowers are eligible for all the repayment plans listed below, income-contingent repayment is the only income-driven option available to parent PLUS borrowers.

• Grace period: 6 months.

• Income-based repayment option: Yes.

• Standard repayment: Your payments are fixed in order to pay off the full loan in 10 years.

• Graduated repayment: Your payments are initially lower and will increase, typically every two years, in order to pay off the full loan in 10 years.

• Extended repayment: Your payments are fixed or graduated in order to pay off the full loan in 25 years.

• Revised Pay-As-You-Earn (REPAYE): Any borrower with an eligible federal direct loan can qualify for payments set at 10% of your discretionary income. Your loan term increases from the standard 10 years to 20 or 25 years.

• Pay As You Earn (PAYE): Your qualifications depend on your income and amount of outstanding debt. If you qualify, your payments will be set at 10% of your discretionary income and your loan term increases from the standard 10 years to 20 years.

• Income-based repayment (IBR): Your qualification is based on your income and amount of outstanding debt. If you qualify, your payments are set at 10% or 15% of your discretionary income and your loan term increases from the standard 10 years to 20 or 25 years.

• Income-contingent repayment (ICR): Your qualifications depend on your income, tax filing status and the number of people in your household. Your payments are capped at 20% of your discretionary income or the amount of your fixed monthly payments on a 12-year loan term, whichever is less. Your loan term increases from the standard 10 years to 25 years.

• Consolidation: You can consolidate your federal student loans into a single loan with a weighted interest rate. Consolidation can increase your loan term to up to 30 years, depending on the amount you owe. Parents cannot consolidate their PLUS loans with their children's loans.

Deferment

All PLUS borrowers can request a student loan deferment from their loan servicer in several situations:

• While enrolled at least half-time at an eligible college or career school, graduate fellowship program, rehabilitation training program for the disabled.

• While experiencing economic hardship, up to three years.

• While unemployed or unable to find full-time employment, up to three years.

• While serving in the Peace Corps, up to three years.

• While receiving treatment for cancer.

• While on active military duty or for 13 months after the conclusion of that service or until you return to a college or career school.

General Forbearance

You can request student loan forbearance if you have financial difficulties, medical expenses, change in employment or other reasons your loan servicer deems acceptable. However, interest will continue to mount during any period of forbearance. If possible, you may consider making interest payments to prevent the total amount you have to repay from growing.

General forbearance is granted for no more than 12 months at a time. If you are experiencing hardship at the end of a 12-month period, you can request another. Your loan servicer may set a limit on the maximum period of time you can receive a general forbearance, but the Education Department has no limit.

Mandatory forbearance

Your loan servicer is required to give you forbearance, up to 12 months at a time, in a few situations:

• You are serving in a medical or dental internship or residency program and meet requirements.

• The total amount you owe each month is 20% or more of your total monthly gross income, for up to three years.

• You are serving in an AmeriCorps position for which you received a national service award.

• You are performing teaching service that would qualify you for teacher loan forgiveness.

• You qualify for partial repayment of your loans under the U.S. Department of Defense Student Loan Repayment Program.

• You are a member of the National Guard and have been activated by a governor, but you are not eligible for military deferment.

Death or disability discharge

Loan servicer: Your loan is assigned to a loan servicer after it is disbursed. You may have one of nine servicers: CornerStone; FedLoan Servicing (PHEAA); Granite State – GSMR; Great Lakes Educational Loan Services Inc; HESC/Edfinancial; MOHELA; Navient; Nelnet; or OSLA Servicing.

Contact your servicer