Parent PLUS Loan Grace Period — It Doesn't Exist

#1 Student loan lawyer

Updated on October 9, 2023

Parent PLUS Loans stand apart from other student loans because they do not have a six-month grace period. Instead, they enter repayment immediately after the child you borrowed the loans for leaves school.

But fear not.

There are things you can do if you can’t pay Parent PLUS Loans.

Learn More: What Happens If You Don’t Pay Parent PLUS Loans?

Deferment Options

You can defer Parent PLUS Loans after your child graduates, leaves school, or drops below half-time enrollment. Here’s how:

  • Contact your loan servicer: If you’re unsure who’s handling your student loans, you can find your servicer on the Federal Student Aid website,

  • Request a deferment: Make the call or visit their website to request a deferment. It’s a lifeline to pause payments temporarily.

Exploring Consolidation

Additionally, consider Parent PLUS Loan Consolidation if you feel the weight of student loan payments. In essence, this process provides more manageable repayment options:

  • Access Income-Driven Repayment Plans: Consolidating your parent loans into a Direct Consolidation Loan will allow you to access income-driven repayment plans, specifically, the income-contingent repayment plan. Tailor your repayment to align with your income and reduce monthly payments.

  • Leverage the Double Consolidation Loophole: This strategic move may give you access to even better repayment options with lower monthly payments, like President Biden’s new student loan repayment plan, Save On a Valuable Education (SAVE). Understanding the double consolidation loophole can be a key to unlocking savings.

The Interest Rate Reality

Consolidating won’t fetch you a lower interest rate, even if your credit history sparkles. Instead:

  • Fixed Interest Rate: Your new rate locks in and is fixed for the life of the loan, based on the weighted average interest rate of the included loans.

  • No Rate Reduction: Unfortunately, consolidating won’t reduce your interest rate, even if you have an excellent credit history.

Refinancing with a Private Lender

The only path to a better interest rate on Parent PLUS Loans may be to refinance with a private lender. Online marketplaces like Credible enable you to engage with multiple lenders simultaneously, comparing rates and repayment terms.

But you’ll need a strong credit score and sufficient income to cover your new student loan payment and other bills to meet the lender’s requirements for the best rates and terms.

Before you leap into the private loan world, consider the following:

  • Review the Terms: Private loans may not mirror the benefits of Parent PLUS Loans. Understand what you’re relinquishing before making a switch.

  • Loss of Federal Payment Relief: Refinancing could strip you of access to deferment or forbearance during financial hardship or other qualifying situations.

  • Ineligibility for Specific Federal Plans: You might lose access to income-driven repayment plans and forgiveness programs such as Public Service Loan Forgiveness.

  • Potential Loss of Federal Protections: Refinancing with a private lender severs ties to federal protections unique to Parent PLUS Loans.

In short, while refinancing may present a lower interest rate, it also risks valuable federal benefits the U.S. Department of Education extends to federal student loan borrowers.

Before you give those up, weigh the pros and cons to align your decision with your long-term financial aspirations and the particularities of Parent PLUS Loans.

Related: When Do Parent PLUS Loans Get Disbursed?

Bottom Line

Face the reality of Parent PLUS Loans: There’s no traditional grace period. But that doesn’t leave you stranded.

While the absence of a grace period might seem challenging, you have tools and strategies to navigate this financial journey. Embrace these options with confidence, knowing that temporary relief and long-term solutions are within your grasp.

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Can you defer a Parent PLUS Loan for six months?

Yes, you can defer Parent PLUS Loans while your student is enrolled at least half-time, and request an additional six-month deferment after they drop below half-time, graduate, or withdraw.

Can Parent PLUS Loans be deferred during graduate school?

Yes, parent PLUS loans can be deferred during graduate school if you attend at least half-time, or during an eligible full-time graduate fellowship.

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