Are parent PLUS loans eligible for forgiveness? (2024)

Are parent PLUS loans eligible for forgiveness?

Parent borrowers may be eligible for Public Service Loan Forgiveness (PSLF) after making 120 qualifying payments (ten years). Parent PLUS loans are eligible if they are in the Direct Loan program or included in a Federal Direct Consolidation Loan. The borrower must work full-time in a qualifying public service job.

Does student loan forgiveness apply to parent PLUS loans?

And like other federal student loans, Parent PLUS Loans provide opportunities for loan forgiveness. However, qualifying for Parent PLUS student loan forgiveness can be somewhat difficult, as there are fewer paths to forgiveness than are offered to federal Direct and Graduate PLUS student loan borrowers.

Why are parent PLUS loans not eligible for PSLF?

Parent PLUS Loans on the surface are ineligible for PSLF because these loans don't provide access to a qualifying repayment plan. However, if you consolidate your Parent PLUS Loans under a Federal Direct Consolidation Loan, you can access Income-Contingent Repayment (ICR) which is eligible for PSLF.

Can I transfer my parent PLUS loan to my child?

Parent PLUS loans are made directly to parents for their child's education. Under the current rules, parents cannot transfer these federal loans to a child, and they are solely responsible for paying back the loan.

What student loans are not eligible for forgiveness?

You're not eligible for federal student loan forgiveness programs if you have private loans, but there are other strategies for managing private loan debt.

Are parent PLUS loans student loans?

The Direct PLUS loan is a federal student loan program. One type of Direct PLUS loan is the Parent PLUS loan, made to the parent or legal guardian of a dependent undergraduate student to help cover the cost of the student's education.

Are parent PLUS loans considered undergraduate loans?

The federal Parent Loan for Undergraduate Students (PLUS), available through the Direct Loan Program, lets parents borrow money to cover any costs not already covered by the student's financial aid package, up to the full cost of attendance.

What happens to my parent PLUS loan when I retire?

The Education Department doesn't forgive loan balances for parents when they retire. It will keep sending bills and adding interest until you pay off the debt, die or become totally and permanently disabled, or qualify for one of the department's student loan forgiveness programs.

Can I transfer my parent PLUS loan to my spouse?

Transfer the Parent Loan to a Spouse or Child

Your spouse or child can transfer the Parent PLUS Loan into their name if they have a good credit score (e.g., 680+) and a steady income showing they can pay back the college debt plus their living expenses.

What is the parent plus double consolidation loophole?

In addition, parent PLUS loans aren't eligible for some other types of federal student loan forgiveness programs. To get around this, some borrowers go through two or more federal consolidations to hide the origin of the loans, then request an IDR plan. This process is often called the double consolidation loophole.

What is the max amount for parent PLUS loan?

Unlike all other federal student loans, there are no explicit borrowing limits for parent PLUS loans. Parents may borrow up to the full cost of attendance, which is determined by the institution, not the government, and includes books, travel and living expenses.

What are the rules for parent PLUS loan?

To be eligible for a Direct PLUS Loan for parents, you must be a biological or adoptive parent (or in some cases a stepparent), not have an adverse credit history, and meet the general eligibility requirements for federal student aid (which the child must meet as well). Was this page helpful?

Are parent PLUS loans forgiven after 10 years?

While parent PLUS loan forgiveness isn't as widely available as forgiveness for student borrowers, a few options do exist. Some options include the Income-Contingent Repayment plan (forgiveness after 25 years of payments) and Public Service Loan Forgiveness (forgiveness after 10 years), as well as other methods.

Which student loans qualify for forgiveness?

The Public Service Loan Forgiveness (PSLF) program forgives the remaining balance on your federal student loans after 120 payments working full time for federal, state, Tribal, or local government; the military; or a qualifying non-profit. Learn more about PSLF and apply.

How do I know if my student loans will be forgiven?

Your loans should automatically qualify for forgiveness after you've spent 20 or 25 years in repayment. Reach out to your loan servicer about any steps you may need to take.

Do parent PLUS loans count as federal loans?

Direct PLUS Loans are federal loans that graduate or professional students and parents of dependent undergraduate students can use to help pay for college or career school. PLUS loans can help pay for education expenses not covered by other financial aid.

What type of loan is a parent PLUS loan?

This loan (also known as a Direct PLUS Loan), issued by the federal government, lets parents of dependent students borrow funds to help pay for a student's college or career school. (Note: Grandparents and legal guardians are not eligible to take out a Parent PLUS Loan unless they've legally adopted the student.)

Is parent PLUS loan under student or parent?

Finally, it's important to consider who is legally responsible for repaying the loan. With a Parent PLUS Loan, it's the parent's legal responsibility to repay the loan. You may agree with your child that they will repay the loan, but if they don't, it's your responsibility.

Do parent PLUS loans have to be paid back immediately?

Repayment of Parent PLUS Loans begins once the loan is fully disbursed to the school. You can request deferment on repayment, but interest will accrue during that time. Refinancing could lower your interest rate and change your repayment length.

Who pays back a parent PLUS loan?

A Direct PLUS Loan made to you as a parent cannot be transferred to your child. You are responsible for repaying the loan. Can I ever postpone making loan payments? Yes, under certain circ*mstances you may receive a deferment or forbearance, which allows you to temporarily stop or lower your payments.

Who is responsible for parent PLUS student loans?

Key Takeaways. PLUS loans are federal loans that parents can take out to cover their child's college costs. The parent, not the student, is responsible for repaying the PLUS loan. PLUS loans don't qualify for all of the income-driven repayment plans that student loans do.

What disqualifies you from a parent PLUS loan?

If you're a parent or graduate student seeking a Direct PLUS Loan, one of the requirements to qualify is that you must not have an adverse credit history. If your application is denied because of an adverse credit history, don't give up. You still have options.

Do parent PLUS loans transfer on death?

If a borrower dies, their federal student loans are discharged after the required proof of death is submitted. The borrower's family is not responsible for repaying the loans. A parent PLUS loan is discharged if the parent dies or if the student on whose behalf a parent obtained the loan dies.

Can divorced parents split a parent PLUS loan?

If a student's parents are divorced, both the custodial and non-custodial parent may borrow a PLUS Loan for their dependent, undergraduate student.

How are parent PLUS loans divided in divorce?

What happens to a Parent PLUS Loan in a divorce? Nothing happens to Parent PLUS Loans in a divorce. The person who filled out the FAFSA paperwork and signed the promissory note remains responsible for repaying the debt. The lender will continue to hound the parent-borrower for payment.