Direct PLUS Loans: Is Interest Charged During a Deferment or Forbearance?

Question: Is interest charged on a Direct PLUS Loan during a deferment or forbearance?

Answer: Interest is charged on a Direct PLUS Loan beginning on the date of the first loan disbursement, and it continues to be charged during periods of deferment or forbearance.

You may either pay the interest as it accrues (the Direct Loan Servicing Center will send you a quarterly interest statement), or you may allow the interest to be capitalized (added to your loan principal balance) at the end of the deferment or forbearance. Capitalization increases the total loan amount that you must repay.

* Addendum: As of October 1, 2013, the Direct Loan Servicing Center no longer services Direct Loans. The US Department of Education has transferred student's loans to other federal loan servicers.

Borrowers can locate their new federal loan service provider by selecting the following "link:" Loan Servicing Centers for Schools Contact Information.