Direct PLUS Loans for Parents, more commonly known as PLUS Parent Loans, are the only type of federal student loan available to parents of students. They have many of the same features as other federal student loans, but the forgiveness options are slightly more limited. If you have a parent PLUS loan, you can only get student loan forgiveness through the government loan forgiveness or income-tested repayment plan.
Parent PLUS loan forgiveness options
If you are considering the Parent PLUS Loan Waiver, there are different ways to do this, depending on your situation.
Income-based repayment plan
The Income-Based Repayment Plan (ICR) is a type of income-based repayment plan. These plans base your monthly payments on your income and the size of your household.
For the ICR plan, your monthly payments are either 20% of your discretionary income or what you would pay on a repayment plan with a fixed 12-year payment, depending on your income, whichever is less. You will be making payments for 25 years; after that, your remaining student loan balance is canceled.
Parent PLUS loans themselves are not eligible for the ICR plan, but you may qualify for it if you first consolidate your parent PLUS loans into a direct consolidation loan.
Public service loan remission
The Public Service Loan Discount (PSLF) is a program offered to parent borrowers. You will need to meet the following criteria:
- Work full-time with an eligible employer, such as a government or non-profit entity.
- Pay off your loans on the income-based repayment plan.
- Make 120 qualifying payments (they don’t have to be consecutive).
Keep in mind that you don’t have to hold a specific job title with your eligible employer, you just need to work in a position that offers the PSLF. You can work for a federal, state, local, or tribal government, or for a nonprofit organization. Military service is also eligible.
You can fill in a PSLF certification each year to prove that you are still eligible for the PSLF and on track to receive forgiveness. When you are ready, you can submit your forgiveness request.
The release of the student loan can occur as a result of extenuating circumstances in life. While this is not the same as canceling a student loan, it will erase some or all of your student loan balance. There are different scenarios in which your student loans could be canceled, including:
- Total and permanent disability.
- Closing of the school.
You may also receive a loan release if your child’s school falsely certifies your eligibility to receive the loan, if your loan is falsely certified due to identity theft, or if your child withdraws from school and the institution does not repay the loan money.
Other ways to get help with student loans from parents
If you are struggling to make payments on PLUS Parent Loans and do not qualify for these forgiveness or release opportunities, you may have other options.
Adjournment or abstention
Parents who take out federal student loans on behalf of their child are eligible for federal forbearance and deferment. During these times, you can put student loan payments on hold for a specified period of time, although interest may continue to accrue.
Abstention and adjournment are usually granted based on specific mitigating circumstances, such as illness or financial hardship. You will need to submit a request for most abstentions and deferrals, and you will be subject to lifetime limits.
Some employers offer student loan payment matching programs up to a certain amount. This option may be listed in your employee handbook, but if it isn’t, talk to your HR partner about the options available to you.
Some states and organizations also offer student loan repayment assistance programs. For example, the State of California Loan Repayment Program (SLRP) helps pay off the loans of physicians, dentists, midwives, pharmacists, and others in the health care field. You will need to work full-time for at least two years or part-time for at least four years in the state. Reward amounts vary by year and employment status.
There are also military reimbursement programs. Eligibility depends on program and service member. For example, the National Guard student loan repayment program provides up to $ 50,000 to help you repay your student loans.
Refinancing is when you take out a new loan with new terms and a new interest rate and pay off all of your outstanding loans. Then you make a single payment on your new refinanced loan. This can only be done through private student lenders, which means you will lose federal benefits such as the forgiveness of public service loans and income-tested repayment. However, refinancing can streamline your loan payments and potentially earn you a lower interest rate or monthly payment.
Refinancing is also the only way to transfer the parent PLUS loan to your child. Not all students will qualify for a refinance loan on their own – meaning you may still need to be a co-signer on the loan – but it is a viable option to offload some of the responsibility for the loan. ready.