Graduating from college is an exciting milestone, but it also marks the beginning of student loan repayment for many borrowers. Most federal student loans come with a grace period—a set timeframe after graduation during which borrowers are not required to make payments. Typically, this period lasts six months. However, not all student loans qualify for a grace period, and PLUS loans follow different repayment rules.
If you or your parents have taken out PLUS loans, it’s important to understand how repayment works and whether a grace period applies. Below, we break it down for you.
What Are PLUS Loans?
PLUS loans are a type of federal student loan that help cover education costs not fully met by other financial aid. There are two types:
• Parent PLUS Loans – These are taken out by parents to help pay for their dependent undergraduate child’s education.
• Grad PLUS Loans – These are available to graduate and professional students who need additional funding for their studies.
Because PLUS loans are designed to cover the full cost of attendance, their repayment structure differs from other student loans.
Do PLUS Loans Have a Grace Period?
Parent PLUS Loans
Unlike traditional student loans, Parent PLUS loans do not have an automatic grace period. Repayment is expected to begin immediately after the loan is fully disbursed. However, parents can request a deferment, which allows them to postpone payments while their child is still in school at least half-time and for up to six months after graduation.
Grad PLUS Loans
Graduate and professional students with Grad PLUS loans automatically receive a six-month deferment after they graduate, leave school, or drop below half-time enrollment. This deferment functions similarly to a grace period, giving borrowers time to prepare for repayment.
How to Manage PLUS Loan Repayments
If you’re worried about making payments immediately after graduation, consider these options.
Request a Deferment – Parents with Parent PLUS loans can request a deferment while their child is still in school and for six months after graduation. Grad PLUS borrowers receive this deferment automatically.
Consider Income-Driven Repayment (IDR) Plans – Grad PLUS borrowers can apply for income-driven repayment plans, which adjust monthly payments based on income. Parent PLUS loans are not eligible for IDR plans unless they are consolidated into a Direct Consolidation Loan.
Look Into Loan Forgiveness Programs – While Parent PLUS loans are not eligible for Public Service Loan Forgiveness (PSLF) directly, they may qualify if consolidated.
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