August 7, 2009

When will I begin repaying my PLUS Loan?

Posted in Parent PLUS Loans at 8:25 AM by Joe From Boston

Good news!

You now have the choice of making payments while your child is in school or deferring payments until after graduation.

If you choose to pay after graduation, interest will accrue from the time of full disbursement. You can choose to pay the interest monthly, or you can defer both interest and principle until the student graduates. If you choose not to pay the interest monthly, it is capitalized no more than four times per year.

Remember that “capitalization” means that the accumulated interest is added to the principal.  All future interest will be calculated using the new, higher principal, so that in the end you will pay more.