How to Get Deferment on Parent PLUS Loans

Securing a deferment on Parent PLUS loans can provide temporary financial relief for parents who are struggling to make payments. This article will explore the process, eligibility requirements, and steps to obtain a deferment, providing a comprehensive guide for managing Parent PLUS loan obligations effectively.

Understanding Parent PLUS Loans

Parent PLUS Loans are federal student loans available to parents of dependent undergraduate students. These loans are designed to help cover the cost of education beyond what is offered through other financial aid sources. While Parent PLUS loans can be a valuable resource, they come with specific repayment obligations and conditions.

What is a Deferment?

A deferment is a temporary suspension of loan payments, allowing borrowers to delay making payments without the loan going into default. During a deferment period, interest may continue to accrue depending on the type of loan and its terms. For Parent PLUS loans, a deferment can be beneficial in managing financial strain, especially during times of economic hardship or unforeseen circumstances.

Eligibility for Deferment on Parent PLUS Loans

To qualify for a deferment on a Parent PLUS loan, borrowers must meet specific criteria set by the U.S. Department of Education. The primary eligibility conditions include:

1. Enrollment Status: If the borrower’s child is enrolled in school at least half-time, the borrower may be eligible for a deferment. This is typically applicable if the child is in a graduate or professional program.

2. Financial Hardship: Borrowers facing financial difficulties may qualify for deferment based on economic hardship or unemployment. Documentation of financial hardship is required.

3. Active Military Duty: If the borrower is serving on active duty in the military, they may be eligible for a deferment during their service period.

Steps to Obtain a Deferment

1. Review Loan Terms: Start by reviewing the terms of your Parent PLUS loan to understand the specific conditions for deferment. This information can be found on your loan servicer’s website or your loan agreement.

2. Contact Your Loan Servicer: Reach out to your loan servicer to discuss your intention to apply for a deferment. They can provide detailed instructions and the necessary forms to complete the application process.

3. Complete Deferment Request Form: Fill out the deferment request form provided by your loan servicer. This form will ask for information related to your financial situation, employment status, or school enrollment status.

4. Submit Required Documentation: Along with the deferment request form, you may need to submit additional documentation to support your eligibility. This could include proof of school enrollment, financial hardship documentation, or military orders.

5. Await Confirmation: After submitting your application, your loan servicer will review your request and determine your eligibility. They will notify you of their decision and provide details on the approved deferment period.

Types of Deferments for Parent PLUS Loans

1. In-School Deferment: Available if the borrower’s child is enrolled at least half-time in an eligible institution. This type of deferment can continue while the child remains in school.

2. Economic Hardship Deferment: For borrowers experiencing significant financial difficulties. Documentation of income and expenses will be required to qualify.

3. Military Deferment: For borrowers who are active duty military personnel. This deferment is available during the period of active service.

Impact of Deferment on Loan Repayment

While deferment provides temporary relief, it’s essential to understand its impact on your loan repayment. During the deferment period, interest may continue to accrue, potentially increasing the total amount you owe. For Parent PLUS loans, interest accrual during deferment periods will be added to the principal balance, which can affect future payments.

Alternatives to Deferment

If you’re unable to obtain a deferment, there are other options to consider:

1. Income-Driven Repayment Plans: These plans adjust your monthly payments based on your income and family size. They can provide more manageable payments during times of financial difficulty.

2. Forbearance: A forbearance is another temporary relief option that allows you to pause payments for a specified period. Unlike deferment, interest accrues during forbearance and is capitalized at the end of the forbearance period.

3. Loan Consolidation: Consolidating your Parent PLUS loans into a Direct Consolidation Loan may provide access to alternative repayment plans and potentially lower monthly payments.

Conclusion

Obtaining a deferment on Parent PLUS loans can be a valuable tool for managing financial challenges. By understanding the eligibility criteria, application process, and impact of deferment, borrowers can make informed decisions and effectively navigate their loan obligations. Always consult with your loan servicer to explore all available options and ensure that you select the best solution for your financial situation.