There is no forgiveness available to Parent PLUS Loan borrowers looking to retire. Remember that Parent PLUS Loan forgiveness is only possible through the Income-Contingent Repayment Plan or PSLF after first consolidating your Parent PLUS Loan into a federal Direct Consolidation Loan.
Your student loans won't be automatically forgiven when you retire.
The student must be a dependent of the parent borrower and must be under 24 years of age. Students 24 or older are not eligible to receive PLUS loan funds, but may borrow an unsubsidized Direct loan in the same amounts as listed above for a PLUS loan denial.
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.
And yes, that would've included Parent PLUS Loans. But in June 2023, the Supreme Court blocked Biden's forgiveness. So, if you were banking on this plan to free you of your Parent PLUS Loans . . . know it's not happening.
Specifically, an ICR only requires you to pay 20% of your discretionary income, or the same amount that you would pay on a fixed 12-year repayment plan, whichever is less. At the same time, the ICR plan extends your repayment term to 25 years. Any remaining loan balances will be forgiven after that time.
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.
No, a Direct PLUS Loan made to a parent cannot be transferred to the child. Was this page helpful? How can I lower my student loan payments? Under what circumstances can my federal student loan(s) be forgiven?
Income-Contingent Repayment is the only income-driven repayment plan parent PLUS loan borrowers can use. To be eligible, you must first consolidate your parent PLUS loans. Switching to Income-Contingent Repayment could lower your payments significantly if you qualify.
Federal Parent PLUS Loans are forgiven when the parent borrower dies or when the child they borrowed the loan for dies. The U.S. Department of Education won't go after the surviving spouse or any other family member to repay the debt.
Parent PLUS loan borrowers can consolidate into a Direct Consolidation Loan, even without another loan, and have access to Income-Contingent Repayment (ICR).
The maximum PLUS loan amount you can borrow is the cost of attendance at the school your child will attend minus any other financial assistance your child receives. The cost of attendance is determined by the school.
Your balance can be forgiven after 25 years. This is the only IDR plan available to parent PLUS borrowers, but you must consolidate your PLUS Loans before enrolling.
At what age do student loans get written off? There is no specific age when students get their loans written off in the United States, but federal undergraduate loans are forgiven after 20 years, and federal graduate school loans are forgiven after 25 years.
The number of people age 60 and older who still have student loan debt has sextupled since 2004 to 3.5 million, and the amount they owe is up 19-fold to $125 billion. Older Americans with student loan debt take second jobs, delay retirement, are less likely to own their own homes and suffer low credit scores.
Generally, if you are approved for, and currently receiving Social Security Disability Insurance (SSDI) benefits, then you should be automatically identified through an existing data match with the SSA and have any qualifying student debt automatically forgiven.
Parent PLUS loans have a fixed interest rate, and the borrower pays an origination fee for each loan. Parent PLUS loans are not subsidized, so interest begins to accrue on the outstanding loan balance as soon as funds are disbursed and continues to accrue even if the loan is in deferment.
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.
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.
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.
Parent PLUS loans account for $111 billion
Currently, 3.7 million parents have $111.3 billion in Parent PLUS loans outstanding. The average parent PLUS loan is roughly $30,000. Parent PLUS loans also come with an interest rate of more than 8%, compared with 5.5% for undergraduate student loans.
Starting in 2025, the Department of Education will close a loophole that allows parent borrowers to find relief through income-driven repayment (IDR) and other programs. Once this "Parent PLUS cliff" hits, borrowers will experience reduced relief options after 2025.
Yes, your Parent PLUS Loan can be transferred to your child. The best way is to refinance the loan with a private lender under your child's name. Not all lenders offer the option to refinance Parent PLUS Loans in another borrower's name, so check with the lender beforehand to see if this is available for you.
While your parent PLUS loans are in default, the government can garnish your wages and take your tax refunds and Social Security checks, among other consequences.
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.