<p>During my application for a direct parent plus loan , I elected to request a deferment in repaying the loan til 6 mos after my son graduates since right now I am unemployed and it would help in the cash flow part. </p>
<p>THe loan request was approved, I was told. However, in the repayment part of the MPN (I think that was what it was called), I did not see the repayment deferment. For repayment, it said that repayment starts after the last of the funds are disbursed, which wd be after next January, 2013.</p>
<p>There was a blurb at the university's FA site that repayment deferment is dependent on certain conditions - but it did not cite the conditions.</p>
<p>a) it was extended to me in the financial aid award letter (why did the university extend this to my son when they knew of the unemployment? - I wondered, too); was kinda clicking yes to the package in order to get this yr’s college pd - it helped address the problem of paying for college this yr.</p>
<p>b) it was my understanding that it cd be pd off after graduation (thus my question in the post) when I assume I wd be gainfully employed by then - three yrs; 'cause why wd the college extend this loan option to an unemployed person?</p>
<p>c) it fills an immediate college funding gap when cash flow is hard right now and is certainly cheaper than raiding 401k.</p>
<p>Bottom line is that you should not take out a loan you cannot afford. Your son’s school doesn’t care if you can afford it. If you take out the loan, the school gets paid . . . and if you end up not being able to pay it back later, that’s your problem, not the school’s - they’ve already got their money!</p>
<p>If you haven’t already accepted the loan, you might want to think twice about doing it. I understand that there’s a funding gap . . . and if you don’t take out this loan, then your son won’t be able to go to this school. But, really, if you can’t afford it, then maybe it’s time to consider a less expensive school. I know that sounds mean . . . but if you get in over your head, that’s YOUR future that’s at stake. And if you take out a Plus loan this year, but can’t make payments and don’t qualify next year, then what happens?</p>
<p>I know you want to help your son . . . but please think carefully about what you’re getting yourself into.</p>
<p>If you must take the loan, absolutely do not sign anything until you work it out with the financial aid office. Don’t trust a verbal promise; until you have an official written statement that the deferment will be allowed, signing the promissory note will force you to begin payment in January.</p>
<p>I do believe PLUS can be deferred. One can defer interest and principle or pay the interest only. Do you know who is servicing the loan? If so, you should be able to contact them and find out what you need to do to defer.</p>
PLUS loan is 7.9% a year. (direct student loans are 6.8)</p>
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Well the college is not really extending the loan to you. The loan is a govt loan. The college lists the option to you as one way to pay for school. How or if you are able to repay the loan does not concern them. Once they have their money, your ability or inability to repay the loan does not affect them at all. They do not take this into consideration - we often see very low income 0 EFC students at certain schools (cough NYU cough) being offered $30-40k a year in parent PLUS loans. The school does not care at all that a parent with a low enough income to qualify for 0 EFC is highly unlikely to be able to repay such a loan.</p>
<p>My understanding is that PLUS repayment can be deferred, though of course the interest will be accruing and capitalizing all that time.</p>