The grace period is the time during which neither you accrue interest on your loan amount nor do you need to pay the loans back. If you have a grace period, you can use it to make some place or find a job role using the money from which you can pay back your loans.
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How long is the grace period for plus loans?
The first point here is that there is no grace period for the Plus loans. After the final loan amount is disbursed, you will have sixty days before they start charging you interest for the due amount. Deferment is available for PLUS loans if they were disbursed on or after 1st July 2008. If any student wants to go for a deferment, they can go for it in the first six months after degree completion. If the borrower is requesting an in-school deferment, there is automatic addition of six months for these students. However, as the PLUS loans are unsubsidized, there is an interest that will accrue during the deferment period.
The individuals will also be able to consolidate their loans but the fact students need to remember is that no sooner the consolidation ends the grace period too will end.
But the best part is that if there is any loan in the grace period, you can then choose to enter the repayment on your new Direct Consolidation Loan until you reach close to the end date of your grace period.
What are plus loans?
The full form of PLUS loan stands for Parent loan for undergraduate students. Parents can acquire the loan or even graduate or professional students can take them. If you want to take a graduate PLUS loan, you should not have an adverse credit history when you check the loan.
The parent PLUS loan is known as the Direct PLUS loan. Those who want it need to know that the Federal government directly pays the loan to the bearers.
- The department of education of the United States is your bearer
- When a credit check is done for individuals should not have an adverse credit history.
- The PLUS loan will at the max cover your attendance cost and will not provide any other financial aid.
Pros and Cons of a PLUS loan
Like every other loan, there are pros and cons for PLUS loans as well.
| Pros of PLUS loans | Cons of PLUS loan |
| With PLUS loans, parents can borrow the complete amount that they need for the student’s education or degree | Parents must pass a credit score check if they want to be eligible for the PLUS loan |
| Anyone can take a PLUS loan irrespective of their financial condition. | A loan fee is deducted from each disbursement they receive and the loan fee deductions are charged by the government primarily |
| The interest rates of PLUS loans are low and have a fixed interest rate | If the parents are taking the PLUS loan, parents are always responsible for the loan payments |
| Parents will not be able to transfer it to the children |
What happens after the end of the Grace Period?
Usually, there is no grace period with the PLUS loan. As soon as the entire loan is completely disbursed, you will be liable to pay it back. Borrowers can pay the loan even while the student is in school and parents can also request a deferment whereby they request to pay it once the student completes their education.
If you defer the loan, you must make the payments while the student is in half-enrollment state or is in school for an additional six months, but interest will accrue even then. There are three repayment plans for the parent PLUS loans.
- Standard repayment plan: You will have to make monthly payments for up to 10 years. If you consolidate more than one parent PLUS loan, the loan extension is possible for up to 30 years.
- Extended repayment plan: If the borrower has more than $30, 000 in direct loans, it allows you to pay off the loans for over 25 years. You get the option of graduated or fixed repayment options.
- Graduated repayment plan: Loan payments must be done for 10 years. But the repayment options will start at a low rate and then every two years, it will increase.
Conclusion
To conclude, finding the repayment plans easily and the absence of a grace period make it a bit tough. The grace period absence does not mean you pay less for the loans but rather, for PLUS loans the amount taken as a loan is always less than the original loan.
