Yes, you can get a deferment on a Parent PLUS Loan while the student is in school (at least half-time) and for a mandatory six-month grace period after they leave school, plus other options like unemployment or economic hardship; however, interest continues to accrue and may capitalize (be added to the principal) during deferment.
Parent PLUS loans in default can lead to wage garnishment without a court order. Borrowers should contact the loan servicer immediately to discuss repayment options like rehabilitation or consolidation. It's important to review all notices carefully and consider seeking financial counseling.
By taking action now, you can make your Parent PLUS loans eligible for an Income-Driven Repayment (IDR) plan, which sets payments as a portion of your income each year and offers many people lower payments compared to the Standard Repayment plan.
If you qualify, you may also defer repayment for the 6 months following the date that the student on whose behalf you borrowed ceases to be enrolled at least half time.
A deferment lets you temporarily reduce or postpone payments on your loan(s) if you're returning to college, going to graduate school, or entering an internship, law clerkship, fellowship, or residency.
You can achieve Parent PLUS loan forgiveness by consolidating into a Direct Consolidation Loan, enrolling in an eligible repayment plan (usually ICR), and meeting specific program requirements, such as employment in public service for PSLF, documented total disability, borrower defense eligibility, or other qualifying ...
The government doesn't forgive Parent PLUS Loans when you retire or draw Social Security benefits, but it has programs that will wipe out your remaining balance after you've made a number of student loan payments under an income-driven repayment plan.
However, Parent PLUS Loans will be capped at $20,000 per student per year and a $65,000 lifetime limit beginning July 1, 2026. Parents who borrowed before that date can continue borrowing under the current limits for up to three additional years or until their student completes their program. Good news.
Look for a lender that offers cosigner release. This allows the primary borrower (your child) to release the cosigner (you) from the loan once they've met specific criteria, such as a having made a certain number of consecutive on-time payments, meeting minimum credit requirements, and providing proof of income.
7 good reasons to defer university admission
How to write an effective deferral letter:
Disadvantages of a Deferment Period
The "7-year rule" for student loans generally refers to when negative marks, like defaults, are removed from your credit report (around 7 years after the first missed payment or default date for federal loans, 7.5 years for private loans), but the debt itself doesn't disappear and must be paid off; it's also a benchmark in bankruptcy proceedings where federal loans can become dischargeable after 7 years from when payments were due, though proving "undue hardship" is required and difficult.
Deferment is a pause in loan payments that may apply during specific situations. Common qualifying circumstances include financial hardship, military service and unemployment. Depending on the loan type, interest may or may not continue to add up while in deferment.
Out of all the income-driven repayment plans, Parent PLUS loans only qualify for the Income-Contingent Repayment (ICR) plan. Enrolling in ICR requires you to consolidate your Parent PLUS loans. Once you're on ICR, you can pursue Public Service Loan Forgiveness.
Defaulting on a Parent PLUS Loan can have serious financial consequences for student loan borrowers. Here's what happens if you haven't made a payment in more than 270 days: Immediate Consequences: Credit Score Impact: Your default will be reported to credit bureaus, which can significantly lower your credit score.
Refinancing. If you have good credit and enough household income to qualify, you may also be able to refinance your Parent PLUS loan to a lower interest rate through a private lender, which can potentially save you money.