Delinquency and default

For Direct PLUS Loans for parents

Notify your loan holder immediately if you anticipate difficulty making a payment!

• Failure to pay all or part of an installment payment when due can result in late charges. Your loan holder also has the option, in some cases, to file a lawsuit against you or garnish your wages.
• This is a loan in your name, not your student's. Even if you have made an agreement with your student that he or she will make the loan payments, that agreement does not affect your legal responsibility to your loan holder, and you ultimately remain responsible for repayment of the loan. Any negative consequences that occur from a default affect you and your credit.

If you fail to make payment on time, your loan is delinquent. If you don’t make payments for 270 days, your loan is then considered to be in default. Defaulting on your PLUS Loan can result in serious consequences.

There are three basic guidelines to follow to avoid delinquency and default:

• Inform your loan holder of changes in your name, mailing address, telephone, or Social Security number so that all correspondence is promptly directed to you.
• Read and keep all documents you receive pertaining to your PLUS Loan, and be sure to understand your loan amount and the payments that are required.
• If you're experiencing financial hardship and are unable to make your payments, call your loan holder for information regarding possible temporary postponement or reduction of payments through a deferment or forbearance. Get more details about your options if you have problems repaying PLUS Loans.

If your PLUS Loan already is in default, you have options.