What's the interest rate?
The interest rate is fixed at 7.9%. Interest is charged from the date of the first disbursement until the loan is paid in full.
When does the parent begin repaying the loan?
The repayment period for a Direct PLUS Loan begins when the loan is fully disbursed, and the first payment is due 60 days after the final disbursement. However, for Direct PLUS Loans with a first disbursement date on or after July 1, 2008, the parent may defer repayment:
• while the student on whose behalf the parent borrowed the loan is enrolled on at least a half-time basis, and
• for an additional six months after the student ceases to be enrolled at least half-time.
How does the parent pay back the loan?
The parent will repay the servicer listed on the disclosure statement provided when he or she received the loan. The loan servicer will provide regular updates on the status of the PLUS Loan, and any additional PLUS Loans that a parent receives. The loan servicer also will be listed in the parent's account at www.nslds.ed.gov.
Repayment Plans—The Direct PLUS Loan Program for parents offers three repayment plans-standard, extended, and graduated-that are designed to meet the different needs of individual borrowers. The terms differ between the repayment programs, but generally borrowers will have 10 to 25 years to repay a loan.
What if a parent has trouble repaying the loan?
Under certain circumstances, a borrower can receive a deferment or forbearance to temporarily stop or lower the payments on a loan.
Can the parent's PLUS Loan be transferred to the student so that it becomes the student's responsibility to repay?
No. A PLUS Loan made to the parent cannot be transferred to the student. The parent is responsible for repaying the PLUS Loan.
Can a PLUS Loan be cancelled (discharged)?
Yes, under certain conditions. A cancellation (discharge) releases the parent from all obligations to repay the loan.
Under the Loan Forgiveness for Public Service Employees Program, borrowers may have the balance of their loans forgiven if they are employed full-time in a public service job and make 120 payments on their loans during that period.