Can You Defer Parent PLUS Loans? How It Works and What to Expect

• Interest keeps growing during deferment, which can feel overwhelming for a parent borrower, but making interest-only payments can help keep your loan balance under control.

• Income-driven repayment plans and loan forgiveness programs might reduce your payments or erase some debt—explore these repayment options to find the relief you need.

• Continue contributing to retirement savings, especially if your employer matches contributions. Balancing today’s payments with saving for the future is essential to financial stability.

We understand how difficult it can be to keep up with loan repayment while your child is still in school. Deferment can offer you a much-needed break:

You can pause payments on your federal Parent PLUS loans while your child is enrolled at least half-time in school, with an extra six months of relief after they graduate or drop below full-time enrollment.

But take note—interest continues to accrue during deferment, and once the six-month grace period ends, deferment is no longer available. If you need more help at that point, consider exploring Parent PLUS loan forbearance or other federal student loan repayment options.

If you’re able, making interest-only payments during deferment could prevent your balance from growing too much, helping you avoid even more stress down the line.

When you pause payments with deferment, interest doesn’t stop accruing. Here’s what you need to know:

• Interest continues to build throughout the deferment period.

• When deferment ends, the accrued interest is added to your loan balance—this is called capitalization.

• A larger loan balance leads to higher monthly payments and could extend your overall repayment term.

Example: Let’s say you defer a $90,000 Parent PLUS loan at a 6.8% interest rate for two years. During deferment, you could accrue over $12,000 in interest. Once deferment ends, that interest is added to your balance, increasing it to $102,000. Now, you’re paying interest on the higher loan amount, which can lead to financial strain if left unchecked.

Tip: If you’re able to, making interest-only payments during deferment can stop your balance from growing. But if that’s not feasible, focus on a strategy that works for you. The goal is to keep the loan from growing out of control and manage your loan repayment in a way that fits your financial situation.

Applying for deferment isn’t automatic, so you’ll need to follow these steps:

1. Choose the Type of Deferment: You can request deferment while your child is enrolled at least half-time or for up to six months after they graduate or drop below half-time enrollment.

2. Fill Out the Application Form: Complete the Parent PLUS Loan deferment request form. It will ask for your personal information, your child’s enrollment status, and the type of deferment you’re seeking.

3. Gather Supporting Documents: You may need proof of your child’s half-time enrollment status. Their school’s financial aid office can provide this information or send it directly to the National Student Loan Data System (NSLDS), which is managed by the U.S. Department of Education.

4. Submit the Form: Send your completed form and any required documents to your loan servicer. Be sure to follow up if you don’t hear back in a reasonable time.

Pro Tip: You can also request deferment when applying for the Direct PLUS Loan if your child’s school offers that option. Check with your loan servicer or the school’s financial aid office for more information.

Deferment can provide temporary relief, but it can also lead to a higher loan balance over time. As interest accrues and is added to your loan (capitalization), your payment amount increases once you start making payments again. This means you’ll end up paying more in the long run.

Related: How Student Loan Interest Accrues

To minimize this impact, consider making interest-only payments during deferment. It’s also wise to keep contributing to your retirement, especially if your employer offers a match, and to build a small emergency fund for unexpected expenses. Balancing these factors is key to staying financially secure.

If deferment doesn’t seem like the best fit, explore income-driven repayment (IDR) plans, which adjust your monthly payments based on your income.

You might also want to consider refinancing private student loans to get a lower interest rate but be mindful that refinancing means giving up federal benefits.

Related: Refinance Parent PLUS Loans

Managing Parent PLUS loans can feel overwhelming, but you don’t have to navigate it alone.

If you need help exploring your options or figuring out the next steps, my team and I are here to guide you.

We specialize in helping families like yours find the right path forward. Book a call with us when you’re ready.