You do not have to pay Parent PLUS loans while your child is in school, but only if you request an in-school deferment. By default, repayment begins as soon as the loan is fully disbursed, and your first bill typically arrives about 60 days later, while your child is still in class. Parent PLUS loans have no automatic grace period, so if you take no action, your servicer will expect monthly payments right away.
When the First Payment Is Due
Federal regulations start the repayment clock the moment a Parent PLUS loan is fully paid out to the school. Your first monthly statement lands roughly 60 days after the final disbursement for the academic year. The loan is funding your child’s education, but the payment obligation sits on your budget almost immediately.
Undergraduate students who borrow Direct Subsidized or Unsubsidized loans get an automatic six-month grace period after leaving school or dropping below half-time. Parent PLUS loans carry no equivalent automatic pause. If you do nothing, monthly payments begin while your child is still sitting in lectures. The only way to avoid that is to actively request a deferment, pay interest only, or accept a forbearance.
How the In-School Deferment Works
You can request an in-school deferment that postpones principal payments for as long as the student you borrowed for stays enrolled at least half-time at an eligible institution. Once the student graduates, withdraws, or drops below half-time, you get an additional six-month buffer before your first required payment. This is built into the federal rule, but it only activates when you ask.
Who Qualifies
Eligibility hinges on the student’s enrollment status, not your finances. The student must carry at least a half-time course load, which most schools define as six credit hours per semester, though each registrar sets the exact threshold. If your child transfers, the new school must also participate in federal student aid programs for the deferment to continue.
The deferment applies to Direct PLUS loans first disbursed on or after July 1, 2008. Older PLUS loans would need to explore forbearance instead.
How to Apply
Complete the Parent PLUS Borrower Deferment Request form from the Department of Education and send it to your loan servicer. The form asks for your child’s name and Social Security number, the school’s OPEID code (a six-digit identifier available through the financial aid office), and the exact start and end dates of the current enrollment period.
Uploading the completed form through your servicer’s online portal gets the fastest turnaround. Mail and fax take longer. Plan on about 10 business days for online requests. Keep making payments until you see the account status change to “deferred” on your servicer’s dashboard. If you stop paying before approval and the request is denied, your loan becomes delinquent.
Why Requests Get Denied
The most common problem is a data mismatch. If the enrollment dates on your form don’t align with what the school has reported to the National Student Loan Data System, the servicer rejects the request. Schools are required to certify enrollment data at least every 60 days, so a recent enrollment change may not yet be reflected in the system. If your school doesn’t participate in automated enrollment reporting, you’ll need a registrar’s signature or official seal on the form itself.
Other denial triggers include sending the form to the wrong servicer (confirm at StudentAid.gov), leaving required fields blank, or applying after the student has already dropped below half-time without realizing it.
Interest Still Accrues While You’re Not Paying
Deferment pauses your monthly principal payments. It does not pause interest. Interest accrues every single day at the rate locked in when you took the loan. For loans disbursed during the 2025–2026 academic year, that rate is 8.94%.1Federal Student Aid. Interest Rates for Direct Loans First Disbursed Between July 1, 2025 and June 30, 2026 The daily interest formula is straightforward: multiply your current principal balance by the interest rate and divide by 365.25.
On a $25,000 loan at 8.94%, that works out to about $6.12 per day, or roughly $184 a month in interest alone. Over four years of school, that adds up to nearly $8,800 in unpaid interest if you don’t pay a dime during the deferment.
What Capitalization Does to Your Balance
If you don’t pay the accruing interest during deferment, it gets added to your principal balance at the end of the deferment period.2Federal Student Aid. Student Loan Deferment This is called capitalization, and it means you start paying interest on your interest once repayment begins. That $25,000 loan could become a $33,800 loan before you’ve made a single payment, and every dollar of interest from that point forward is calculated on the higher balance.
Interest-Only Payments Are a Middle Path
You don’t have to choose between full payments and nothing. Even paying $50 or $100 a month toward interest during the deferment meaningfully reduces the capitalization hit. Your servicer will send quarterly interest statements showing how much has accrued, and you can make interest-only payments at any time without affecting your deferred status.
When Deferment Isn’t Available: Forbearance
If your child isn’t enrolled at least half-time, or if your deferment request is denied, forbearance is the short-term fallback. It doesn’t require the student to be enrolled, and it pauses payments for a set period. Interest still accrues and capitalizes just like during deferment, so it’s an expensive safety valve, but it beats missing payments outright. Contact your servicer before you miss a payment to set it up.
What Happens If You Just Ignore the Bills
Skipping payments without arranging deferment or forbearance escalates quickly. Your loan becomes delinquent the day after you miss a payment, and your servicer reports the delinquency to credit bureaus after 90 days. That damage to your credit score can affect your ability to refinance a mortgage, qualify for car loans, or clear employer background checks.
After 270 days of missed payments, the loan goes into default. At that point, the federal government has collection tools that private lenders don’t:3Federal Student Aid. What Are the Consequences of Default
- Wage garnishment of up to 15% of your disposable pay, sent directly to the loan holder.
- Treasury offset, which allows federal tax refunds and certain federal benefit payments to be seized and applied to the debt.
- Loss of eligibility for additional federal student aid, deferment, forbearance, and repayment plan changes until the default is resolved.
The practical takeaway: as soon as the loan is disbursed, either file the deferment paperwork, set up interest-only payments, or start making the regular monthly payment. Waiting to see what the first statement looks like is the move that puts parents in trouble.