Solutions for repayment problems for Direct PLUS Loans

For parents

If you experience financial difficulty, your loan holder offers options that may temporarily reduce or suspend your monthly payments. Don’t wait! Contact your loan holder immediately to check on a possible deferment or forbearance. However, continue making your payments until you receive written notification that deferment or forbearance is granted.

Deferment

A deferment is a period of time during which your loan holder suspends your regular payments.

• You are responsible for payment of the interest that accrues during the deferment period.
• Your loan holder must determine your eligibility for any of these deferments.
• In most cases, to apply for a deferment, you must complete the appropriate form with all required documentation and return it promptly to your loan holder.

Forbearance

Forbearance is a period of time during which your loan holder temporarily reduces or suspends your regular payments.

• You may request forbearance if you are willing but unable to make your full payment.
• You are responsible for payment of the interest that accrues during the forbearance period.
• You may pay the interest as it accrues or allow it to capitalize.
• Capitalized interest is added to the principal balance and may result in a higher monthly payment upon conclusion of the forbearance period.

Mandatory forbearance conditions do exist and are explained in the Master Promissory Note.

If you die or the student for whom you borrowed the loan dies, your PLUS Loan obligation is cancelled. Your loan also may be cancelled in other situations. Learn more. Generally, however, federal student loans are not cancelled or discharged due to bankruptcy.