<p>I received a Federal Direct PLUS Loan. My grandfather gave me the money so I do not need it. However, having the extra money is helpful in case of an emergency. I know the Federal Direct PLUS Loan isn't subsidized for its interest. Does the interest accumulate until I have to pay it off? I was thinking that I could keep the Federal Direct PLUS Loan, pay it off right before I graduate, and not have to pay the interest. Is this right?</p>
<p>I think the interest begins accruing immediately. check with your lender. Maybe you can return some of the amount you borrowed and keep a small amt as a cushion?</p>
<p>I some cases you have to start paying back on the loan immediately after you receive the money, or you can defer payment until after you graduate, all the while accruing interest (probably at over 8% a year)</p>
<p>OK, I'm confused. The PLUS loan is for parents, not for students. You don't "receive" the loan; your parents apply for it. If they are creditworthy, they get the loan. All parents, regardless of need, are eligible to apply for a PLUS loan.</p>
<p>So, did your award letter simply mention the PLUS loan? Or did your parents apply for it and receive it?</p>
<p>If they received it:
Unsubsidized means that the interest begins accruing immediately. If you can defer payments on a PLUS loan (which I'm not sure is possible), that interest is added to the amount of the loan at the end of the year, and then that balance + interest becomes the new balance, and interest then accrues on the new amount. You cannot keep the money, pay it off before you graduate and avoid paying the accrued interest.</p>