Parent PLUS loans need to be repaid right away unless they are deferred. When you take out a parent PLUS loan, a direct loan granted by the U.S. Department of Education to parents, you’re expected to begin repayment immediately after the loan is disbursement.

So, unless you apply and are approved for deferment, which you can request when you apply for the loan, you’ll likely have to start paying back the loan while your student is still in school. When you do start paying, there are four different repayment plans to choose from. Read about these below.

Parent PLUS Repayment Plan Options

The three parent PLUS loan repayment plan options that anyone can qualify for are the:

  • standard repayment plan
  • the graduated repayment plan
  • and the extended repayment plan. 

The fourth and final option is the income-contingent repayment plan and is only available to those that choose to consolidate their parent PLUS loan.

If you choose a standard plan, you’ll be making fixed payments for 10 years until the loan is paid back in full. If you go with the graduated plan, your payments increase every two years. On the extended plan, you’ll have up to 25 years to pay off the loan. 

The total interest paid is lowest on the standard plan, higher on the graduated plan, and highest on the extended plan. The monthly payments are highest on the standard plan, mixed from low to high on the graduated plan, and lowest on the extended plan.

Both the standard and graduate repayment plans are 10-year terms, but the standard plan results in paying less interest on the loan in the end because you’re making fixed payments and keeping up with the interest as it accrues. 

On the graduated plan, the interest accrues at the same rate regardless of how much you’re paying back, so your principal stays higher for the first few years than it would on the standard plan. This option is best only for those that can’t afford to make high monthly payments right away but expect to be able to in the future.

The time it takes you to pay back a loan on the income-contingent repayment plan depends on the terms of your direct consolidation loan but could take up to 25 years. Your monthly payments are contingent on your income each year, hence the name.