Forbearance for Parent PLUS Loans: What to Expect

Understanding Parent PLUS Loans and Forbearance

Parent PLUS Loans are federal loans designed to help parents finance their child’s undergraduate education. Unlike other federal student loans, these are taken out by the parent, not the student, and come with unique repayment terms. When financial hardships arise, forbearance can provide temporary relief by allowing borrowers to pause or reduce payments.

How Forbearance Works for Parent PLUS Loans

Forbearance is a temporary pause or reduction in loan payments, but interest continues to accrue. There are two main types:

1. Discretionary Forbearance – Granted at the lender’s discretion for financial hardship or other qualifying reasons.
2. Mandatory Forbearance – Required by law in specific situations, such as serving in a medical or dental internship.

For Parent PLUS Loans, forbearance is typically discretionary, meaning approval depends on the loan servicer’s policies.

The Current Landscape of Student Loan Debt

Student loan debt in the U.S. has surpassed $1.7 trillion, with Parent PLUS Loans contributing significantly. Many parents who took out these loans are now facing financial strain due to:

• Rising inflation
• Job market instability
• Unexpected medical expenses

Forbearance can be a lifeline, but it’s not a long-term solution. Understanding the implications is crucial.

Pros and Cons of Forbearance

Advantages

• Immediate Relief – Helps avoid default during financial hardship.
• Flexibility – Can be requested in short-term increments (usually 12 months at a time).

Disadvantages

• Interest Accumulation – Unpaid interest capitalizes, increasing the total loan cost.
• Limited Eligibility – Not all borrowers qualify, and repeated forbearance requests may be denied.

Alternatives to Forbearance

Before opting for forbearance, parents should explore other options:

1. Income-Driven Repayment (IDR) Plans

While Parent PLUS Loans aren’t automatically eligible for IDR, they can become eligible through loan consolidation. This could lower monthly payments based on income.

2. Deferment

Unlike forbearance, deferment may stop interest from accruing in certain cases (e.g., returning to school).

3. Refinancing

Private lenders may offer lower interest rates, but this forfeits federal protections like forbearance and loan forgiveness.

How to Apply for Forbearance

The process involves:

1. Contacting Your Loan Servicer – Each servicer has its own application process.
2. Providing Documentation – Proof of financial hardship may be required.
3. Reviewing Terms – Understand how interest will affect the loan balance.

What Happens After Forbearance Ends?

Once forbearance expires, borrowers must resume payments. If financial struggles persist, they may need to:

• Request another forbearance (if eligible)
• Switch to an income-driven plan
• Explore loan forgiveness programs (limited for Parent PLUS Loans)

The Future of Parent PLUS Loan Relief

With ongoing discussions about student loan reform, some proposals include:

• Expanding forgiveness programs for Parent PLUS borrowers
• Capping interest rates or allowing retroactive IDR eligibility
• Increasing transparency in loan servicing

Until then, forbearance remains a key tool for struggling borrowers.

Final Thoughts for Borrowers

Parent PLUS Loans can be a financial burden, but forbearance offers a temporary reprieve. Weighing the pros and cons—and exploring alternatives—can help parents make informed decisions. Staying proactive with loan servicers and monitoring policy changes is essential for long-term financial health.