FAFSA Parent Plus Loan - Are there early repayment penalties?

Good news! Federal student loans, including Parent PLUS loans, do NOT have prepayment penalties. You can pay them off as early as you want without any additional fees. This is actually one of the benefits of federal loans compared to some private loans. Just make sure when you make extra payments that you specify you want it applied to the principal balance, not just advancing future payments.

congrats on your daughters acceptance!! we paid off my sons parent plus loan early last year and didnt get charged anything extra. just make sure your telling them its for that specific loan because we had multiple

One important thing to consider: while there are no prepayment penalties on Parent PLUS loans, sometimes it might actually be better to invest that inheritance money elsewhere if the interest rate on your Parent PLUS loan is low. Federal student loan interest is tax-deductible up to $2,500 per year, and you might get better returns by investing the money. Just something to think about from a financial planning perspective!

My sister thought the same thing and paid off her Parent PLUS loan early last year only to find out she could have qualified for some forgiveness under Biden's plan if she'd waited!!! Double check if any forgiveness options might be coming before you pay it all off!!

I've been trying to reach someone at Federal Student Aid for WEEKS about Parent Plus loan repayment options and kept getting disconnected or waiting forever!!! So frustrating! Finally I found this service called Claimyr that got me through to a real person in under 30 minutes. They call FSA for you and then connect you when they reach an agent. Saved me hours of hold time! You can see how it works at https://youtu.be/TbC8dZQWYNQ and the site is claimyr.com. The agent confirmed there are NO prepayment penalties on Parent PLUS loans and gave me some really helpful tips about how to make sure extra payments go to principal.

To address your specific question: No, there are no prepayment penalties on Parent PLUS loans. But when making extra payments, you need to provide specific instructions to your loan servicer. Log into studentaid.gov, go to your loan servicer's website, and look for options like "apply to principal" or "do not advance due date" when making additional payments. Otherwise, they might just apply it to future scheduled payments rather than reducing your principal directly. Also remember that Parent PLUS loans have the highest interest rates of all federal loans (currently 7.54%), so paying them off early generally makes good financial sense if you have the means to do so.

Wait so Im confused... are Parent PLUS loans the same as the regular FAFSA loans? My son is going to college next year and im trying to figure out all this loan stuff its so complicated!!

When we paid off our Parent PLUS loans early, we made a HUGE mistake that cost us thousands! We just sent in extra money each month without specifying how to apply it. Found out later they were just advancing our due date instead of reducing principal. ALWAYS call your loan servicer first or use their online payment portal to specifically designate extra payments as "principal only" or you might not be saving as much interest as you think!

Parent PLUS loans are the WORST! The interest rates are ridiculous compared to the student loans, and they give them out like candy even when families can't really afford them. Sure there's no prepayment penalty but the whole system is designed to trap parents in debt for their kids' education! Sorry for the rant but I'm still paying my daughter's PLUS loans and she graduated 7 years ago because the interest just keeps piling up!

Just wanted to add another perspective as someone who works in financial aid - you're absolutely right that there are no prepayment penalties on Parent PLUS loans! One tip I always give parents: if you're planning to pay off early with a lump sum like your inheritance, consider making a test payment first (even just $50-100 extra) to make sure you understand how your servicer processes "principal only" payments. Each servicer's website is slightly different, and it's better to figure out the process with a small amount than risk misapplying a large payment. Also, keep detailed records of all your payments - screenshot confirmations showing the principal reduction. This helps you track your progress and gives you documentation if there are ever any discrepancies. Congratulations on your daughter's acceptance!

This is such great advice from everyone! As someone new to navigating student loans, I'm really grateful for this community. I had no idea about the difference between advancing due dates vs. applying to principal - that seems like such an easy mistake to make. @Malik Thompson, your suggestion about doing a test payment first is brilliant! I'm definitely going to do that when the time comes. It's also reassuring to hear from multiple people that there really are no prepayment penalties on Parent PLUS loans. The 7.54% interest rate is definitely high, but knowing I can pay it off early without penalty makes me feel much better about taking on these loans for my daughter's education. Thanks everyone for sharing your experiences and expertise!

As someone who recently went through this exact situation with my own daughter's college loans, I can confirm what others have said - no prepayment penalties on Parent PLUS loans! We used a combination of savings and a small inheritance to pay ours off about 6 months early and saved quite a bit on interest. One thing I'd add that hasn't been mentioned yet is to double-check if your daughter's school offers any tuition payment plans that might reduce how much you need to borrow in the first place. Some schools offer 10-month or 12-month payment plans with little to no fees, which can help spread costs and potentially reduce the total loan amount. Also, make sure to keep all your loan documents organized - you'll want records of the original loan amounts, payment history, and payoff confirmation for tax purposes. The interest you pay is tax-deductible (up to $2500/year as mentioned earlier), so good record-keeping helps at tax time. Congratulations again on your daughter's acceptance - what an exciting time for your family!

Just wanted to echo what everyone else has said - no prepayment penalties on federal Parent PLUS loans! I'm actually a college financial aid counselor and this is one of the most common questions parents ask. The key things to remember: 1) Always specify "apply to principal" when making extra payments, 2) Log into your servicer's website rather than just mailing checks to ensure proper application, and 3) Keep screenshots of your payment confirmations. One additional tip - if you're getting an inheritance next year, you might want to calculate whether making smaller extra payments throughout the year (as you get portions of the inheritance) could save you more interest than waiting to make one lump sum payment. Either way though, paying off a 7.54% loan early is almost always a smart financial move. Best of luck with your daughter's college journey!

As someone who just went through the Parent PLUS loan process last fall, I can confirm there are absolutely no prepayment penalties! We actually paid off about $15,000 early when my husband got a bonus, and the process was pretty straightforward. Just want to add one thing I learned the hard way - when you log into your servicer's website to make the extra payment, look for language like "do not advance due date" in addition to "apply to principal." Some servicers use slightly different wording, but the key is making sure they don't just push your next payment due date further out. Also, after you make a large payment, check your account a few days later to verify it was applied correctly. If there's any confusion, call right away because it's much easier to fix immediately than months later. Your inheritance plan sounds like a great way to knock out that debt early and save on all that 7.54% interest!