Parent PLUS loan deferment decision - need advice for 2025-2026 repayment options

deferring means interest keeps adding up the whole time, but not deferring means u gotta start paying right away. i chose to defer cuz no way could i pay while my kid was still in school lol

This is an important decision that affects the total cost of the loan. When you defer a Parent PLUS loan, interest accumulates and gets added to your principal balance (this is called capitalization). So yes, you'll end up paying more over the life of the loan if you defer. Here's a breakdown: - If you defer: No payments during school, but interest grows and compounds, increasing your total debt - If you don't defer: You start making payments within 60 days after full disbursement, which keeps the total cost lower over time The current Parent PLUS interest rate for 2025-2026 is 7.38% - not insignificant. On your $17,800 loan, that's about $1,313 in interest just in the first year.

Yes, you can absolutely make interest-only payments during deferment! That's a smart approach many parents take. You're not required to make any payments during deferment, but voluntarily paying just the interest will prevent it from capitalizing (adding to your principal). As for reducing the rate, you have a few options: 1. Look into refinancing with a private lender after a year or so of payments (though you'll lose federal benefits) 2. Set up autopay for a 0.25% interest rate reduction 3. Some loan servicers offer slight rate discounts for consistent on-time payments Keep in mind that federal Parent PLUS loans have better protections than private loans, including more flexible repayment options if you run into financial difficulty later.

omg so much terrible advice here. Parent PLUS loans are the WORST type of loans!! The interest is ridiculous and they trap parents for decades!!! My parents took out PLUS loans for my older sister 15 years ago and STILL haven't paid them off because of the crazy interest. AVOID AT ALL COSTS!!!!

I decided not to defer on my Parent PLUS loan and it was pretty rough making those payments while still paying for all my son's other expenses during college. If I could do it over, I probably would have deferred but made interest-only payments to prevent that capitalization others mentioned. Just be realistic about your budget and what you can handle right now.

If you're having trouble deciding about Parent PLUS loan deferment, you might also want to check if your daughter qualifies for additional grant aid or scholarships to reduce the amount you need to borrow. We were in a similar situation last year and ended up reducing our PLUS loan by $5,000 after our daughter applied for some additional scholarships mid-year.

One option nobody's mentioned is the Parent PLUS Income-Contingent Repayment (ICR) plan. If you consolidate your Parent PLUS loan through the Direct Consolidation program, you can access ICR which caps payments at 20% of your discretionary income. This might be a good middle ground if you're worried about both immediate payments and long-term interest accumulation. As for your original question about deferment, I'd suggest this approach: 1. Choose deferment to give yourself flexibility 2. Set up voluntary interest payments during school 3. Pay more when you can to reduce principal This gives you the best of both worlds - no required payments during school, but you're still preventing the worst of the interest capitalization.

When I was trying to decide about deferring my Parent PLUS loans last year, I spent HOURS trying to get through to someone at Federal Student Aid to explain my options. Kept getting disconnected or waiting forever. Finally found this service called Claimyr (claimyr.com) that got me connected to an actual FSA agent in about 15 minutes. They have a video showing how it works: https://youtu.be/TbC8dZQWYNQ The agent walked me through a full comparison of deferment costs vs. immediate repayment for my specific situation. Turns out for my loan amount and timeframe, the difference was about $4,800 in extra interest over the life of the loan if I deferred. Having those exact numbers helped me make my decision.

i wanna add somthing - when my son graduated i was SHOCKED at how big the loan got during deferment. went from like 22k to almost 28k just from interest!! wish someone had warned me

One last consideration: think about your daughter's expected graduation date and your proximity to retirement. Many parents don't realize that Parent PLUS loans can affect retirement plans. If you'll be retiring within 5-10 years of her graduation, you might want to be more aggressive with repayment. These loans don't disappear when you retire, and they can create significant strain on fixed retirement income.

my sister did the thing where she deferred but paid the interest monthly and it worked great for her! the loan didn't grow while her kid was in school but she didn't have to stress about full payments either

Based on all the advice here, it sounds like you're leaning toward deferment with voluntary interest payments. That's a smart approach that many parents successfully use. I'd just add that you should get everything in writing from your loan servicer about how to make sure those voluntary payments are applied to interest correctly. Sometimes they need specific instructions to apply payments the way you want.