PLUS Loan Question

Paying for College
1

<p>I'm going to dig all my paperwork out and re-read it to see if I can find the definitive answer, but I know there are financial aid experts on this board who may be able to give me a quick answer.</p>

<p>We took out a PLUS loan for a portion of our DD's tuition this year, more to coordinate cash flow with my husband's bonus payments than anything else. We have no intention of carrying the loan for a long period of time and fully expect to pay down a huge chunk of it before May of next year.</p>

<p>I received a statement from Direct Loans today with the amount of the disbursement and the anticipated start date of repayment: 5/25/2010. This would be two months after the third disbursement of the year (DD is on the quarter-system).</p>

<p>Now as I recall when I did the initial application and paperwork, it said that interest begins accruing two months after the FINAL disbursement, which is when repayment is to begin (under one of the varying repayment plans available).</p>

<p>Does this mean that from now until 5/25/2010 when that repayment is set to begin that NO interest is accruing?</p>

2

<p>Interest starts accruing on the date of disbursement.</p>

3

<p>Yes, interest always accrues but you can delay payments many times, even until graduation if you think money might be looser then.
[Flexible</a> Payment Terms for Parent Plus College Loans Aids Financing Burdens - WSJ.com](<a href=“http://online.wsj.com/article/SB123380231753950713.html]Flexible”>http://online.wsj.com/article/SB123380231753950713.html)
I thought I saw one bank that let a parent defer it all, but I would never recommend that because the amount would be much higher.</p>

4

<p>Interest is definitely accruing from the date of disbursement.</p>

5

<p>I guess what is confusing me is the fact that on the statement, its giving me a repayment start date and the amount due, and it doesn’t include any of the interest.</p>

<p>I would have expected that the repayment date would then begin two months after the FIRST disbursement in September (which would be November 2009) yet it is showing as starting in May 2010, 8 months after that disbursement.</p>