The only income based payment plan that qualifies if you consolidate PPL is Income-Contingent Repayment, so consolidating to apply for SAVE isn't allowable.
A federal court issued an injunction preventing the U.S. Department of Education from implementing parts of the Saving on a Valuable Education (SAVE) Plan and other IDR plans. Note: Eligible borrowers may now enroll in PAYE and ICR Plans.
Out of all the income-driven repayment plans, Parent PLUS loans only qualify for the Income-Contingent Repayment (ICR) plan. Enrolling in ICR requires you to consolidate your Parent PLUS loans. Once you're on ICR, you can pursue Public Service Loan Forgiveness.
Direct consolidation loans are eligible for federal student loan forgiveness, whether through an income-driven repayment (IDR) plan, Public Service Loan Forgiveness (PSLF), or Teacher Loan Forgiveness for qualifying teachers.
What loans qualify for forgiveness? Only loans you received under the Direct Loan Program are eligible for PSLF. Loans you received under the Federal Family Education Loan (FFEL) Program, the Federal Perkins Loan (Perkins Loan) Program, or any other student loan program are not eligible for PSLF.
What does paid in full by consolidation mean? Paid in full by consolidation in student loan terms means that multiple loans have been combined into one larger loan — typically with improved repayment terms, such as more flexible repayment options, lower monthly payments, or greater loan forgiveness opportunities.
Parent PLUS loans can be eligible for Income-Contingent Repayment (ICR) and Public Service Loan Forgiveness (PSLF). However, they must be consolidated into a federal Direct Consolidation loan first. Your eligibility for these programs can depend on your income and the type of employer you work for.
How to Use the Double Consolidation Loophole: The key to using the double consolidation loophole is to consolidate each of your Parent PLUS Loans twice. In this scenario, a borrower can have as few as two Parent PLUS Loans.
For example, you usually don't want to combine Parent PLUS loans with any other type of loan, because consolidating them together could mean that you will only be eligible for an Income-Contingent Repayment (ICR) plan, which is usually more expensive than other IDR plans.
Who qualifies for the SAVE plan? Most borrowers with federal student loans are eligible for the SAVE plan. There is no income limit to qualify. If you have certain types of federal student loans, such as Perkins or FFELP loans, you may have to consolidate them before you can get on any IDR plan, including SAVE.
While the SAVE Plan is a good option for most borrowers, it's not the best option for everyone. If you're trying to pay your loans off in a shorter period of time or if you're aiming to pay only a certain amount over time, then the SAVE Plan may not align with your repayment goals.
Consolidation can lower your monthly payment by giving you a longer period of time (up to 30 years) to repay your loans. If you consolidate loans other than Direct Loans, consolidation could give you access to more income-driven repayment (IDR) plan options and Public Service Loan Forgiveness (PSLF).
Through a Direct Consolidation Loan, you can combine multiple Parent PLUS Loans. But a Direct Consolidation Loan only provides access to the income-contingent repayment plan which calculates monthly payments at 20% of your discretionary income.
Generally, Federal Parent PLUS loans are not eligible for the income-driven repayment plans, including income-contingent repayment (ICR), income-based repayment (IBR), pay-as-you-earn repayment (PAYER) and revised-pay-as-you-earn repayment (REPAYER).
This includes all types of outstanding Federal Family Education Loan (FFEL) Program loans (because only Direct loans are eligible for SAVE). Outstanding parent PLUS loans will not be considered, but the initial balances of parent PLUS loans that are included in consolidation loans will be considered.
The $100,000 Loophole.
With a larger below-market loan, the $100,000 loophole can save you from unwanted tax results. To qualify for this loophole, all outstanding loans between you and the borrower must aggregate to $100,000 or less.
THIS PROCESS MUST START NO LATER THAN JANUARY 2025 to make it in time. From start to finish, the double consolidation can take 4-6 months to execute with no mistakes. If you miss that date, you're stuck paying 20% of your income on Income Contingent Repayment (ICR) with a very low deduction (100% of the poverty line).
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.
On August 24, 2022, Joe Biden announced a sweeping federal student loan forgiveness order, in which Parent PLUS Loans are included in. The plan attempted to forgive $10,000 for everyone and up to $20,000 for those who were approved for the federal Pell Grant program when they borrowed student loans.
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.
If you consolidate loans other than Direct Loans, consolidation may give you access to forgiveness options, such as income-driven repayment or Public Service Loan Forgiveness (PSLF). If you consolidate, you'll be able to switch any variable-rate loans you have to a fixed interest rate.
A federal court issued an injunction preventing the U.S. Department of Education from implementing parts of the Saving on a Valuable Education (SAVE) Plan and other IDR plans. Note: Eligible borrowers may now enroll in PAYE and ICR Plans. Continue to check this page for more information as developments occurs.
You don't get reported when you're in forbearance. During the on-ramp period (through Sept. 30, 2024), we automatically put your loan in a forbearance for the payments you missed. Here's what this means: Your account was no longer considered delinquent and was made current.