What is the Cancellation Policy for a PLUS Loan?

The cancellation policy for most federal student loans, including PLUS loans, is uniform. The same policy applies to Stafford loans and Perkins loans as well. It is possible to cancel loans, but you must do so within a narrow window of time. If you miss the window, you will not be able to cancel the debt.

Cancellation Time Frame

The cancellation time frame on major federal student loans is 14 days after notification your account has been credited. Your school must notify you in writing within 30 days of the time your account is credited. This notification can come either 30 days before or 30 days after the account credit or anytime in between. The school receives the funds directly from the government, so this is the only way you, the borrower, actually know the funds have been delivered. Within 14 days of receiving this notice, you have to notify the school you wish to cancel the debt. You also have until the first day of the payment period, whichever date happens to be later. 

Missed Cancellation Period

When you miss a cancellation period, you are still obligated to make the payment on the loan. It is important to remember the federal government is not as flexible as a private lender may be. Since this is a policy applied consistently with every borrower, you will not likely be able to get an exception to have your debt canceled. As such, it is best to maintain awareness of when your payment period begins. You can contact your college or university for this information. Additionally, ensure your address is correct so the university's notice reaches you directly and without delay.

Unique Features of a PLUS loan

PLUS loans are unique because they are distributed in the name of the parents of students instead of to students themselves. These loans are meant to cover the remaining gap that exists, if any, after the student has already received the maximum loan amount from Perkins Loans, Stafford Loans, financial aid and scholarship. PLUS loans, as a result, tend to be rather small. They are only distributed in the sum remaining to cover the cost of tuition. The loans go straight to the college and never touch the account of the borrower. In the future, however, it is the parents of the student that are responsible for repaying the debt. 

When to Cancel a PLUS loan

PLUS loans are canceled when a student has a change in academic plans or schedule. The loans are actually sourced each term based on the cost of tuition for that term. This sum depends largely on credit hours being taken and other factors. If a student has a change in these plans, such as taking a term off or reducing credit hours, then the loan will not be in keeping with the actual cost of tuition. It is better to notify the school as soon as possible if you plan on canceling a PLUS loan in order to avoid any possibility of missing the cancellation period.


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