My child can’t pay the loan under my name because he is working? Can he get a deferment?

People struggle a lot with how Parent PLUS loans work.  The main concept they have trouble with is the fact that the loan is in their name and their responsibility.  They think that because it was used for the child’s education, that the child should be paying it.

If they want, this can be the case.  However since the Department of Education considers it the borrowers’ loan, all information is dependent on the borrower.  For example if the parent works more than 30 hours but the child is unemployed, they cannot get an unemployment deferment.  The Income Driven Plans are based on the parent’s income, not the students.  If a child calls in about the loan they are on, they can receive information (with proper authentication) but cannot place a forbearance on the account to bring it current.  And only the parent is allowed on the online account since they are the borrower (this is especially important while making payments).

This of course works in reverse to.  If the child is working and the parent is not, they may qualify for a deferment along with the reverse of the other situations.  In my personal opinion many schools do a really poor job explaining what a Parent PLUS loan is (some actually just plan give wrong information).  While there are many great school financial aid departments out there, the bad ones really cause headaches as it causes a lot of confusion and frustration down the road.