Note: You can request an increase in the amount of a Direct PLUS Loan you previously requested if it's for the same school, same award year, and same student. The loan can't exceed the cost of attendance (COA) minus other aid.
Yes, as long as you are approved you can borrow multiple PLUS loans up to your cost of attendance.
The Double Consolidation Loophole for Parent PLUS Loans is a strategy that reduces your monthly payments through better income-driven repayment plans (such as PAYE, IBR, or SAVE) achieved by consolidating your loans twice.
The application and credit check will determine if a parent is eligible to take out a Parent PLUS loan. Both parents can apply separately though, and students can still benefit if only one parent qualifies for the 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.
Unlike all other federal student loans, there are no explicit borrowing limits for parent PLUS loans.
What Are Some Reasons to Avoid PLUS Loans? First, PLUS loans have no automatic grace period. Then there's the fact they aren't eligible for most IDR plans. Then, borrowing too much is easy to do, and finally, they're nearly impossible to get out of, even in bankruptcy.
Parent PLUS loans can potentially be forgiven after 10 years under specific conditions, such as through the Public Service Loan Forgiveness (PSLF) program after consolidation into a direct consolidation loan. Parent borrowers must enroll in the Income-Contingent Repayment (ICR) plan to qualify for PSLF.
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).
You cannot have an “adverse credit history.” While there's no minimum credit score requirement, loan defaults, bankruptcies, tax liens and certain other negative marks on your credit report could disqualify you.
You must complete a Direct PLUS Application for each year you wish to receive a parent PLUS loan.
Your parent PLUS loan may be discharged if you (not the child) become totally and permanently disabled, die, or (in some cases) file for bankruptcy. Your parent PLUS loan also may be discharged if the student for whom you borrowed dies.
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.
Parents who will be taking out a parent plus loan on behalf of their student to cover Summer or Intersession tuition, should follow the instructions and submit the Parent Plus Loan Form for the correct term.
What happens to my parent's PLUS loan if my parent dies or if I die? Your parent's PLUS loan will be discharged if your parent dies or if you (the student on whose behalf your parent obtained the loan) die.
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.
Generally, you'll have from 10 to 25 years to repay your loan, depending on the repayment plan that you choose. Your required monthly payment amount will vary depending on how much you borrowed, the interest rates on your loans, and your repayment plan. Choose a repayment plan that best meets your needs.
Direct PLUS Loans for Parents
If there is money left over, the school will pay it to you. In some cases, with your permission, the school may give the leftover money to your child.
Loan Amount Limits
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.
Parent PLUS loans are educational loans, and the borrower can get an income tax deduction. When borrowers review their tax deductions, they can deduct up to $2,500 per year in interest paid on the Parent PLUS loan.
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.
A parent may re-apply for a subsequent academic year and if approved, the student will be eligible for a Parent PLUS Loan and not additional unsubsidized loans in the subsequent academic year.
Pay Off High-Interest Loans First
With this approach, you pay off your loans from the highest interest rate to the lowest. You make the minimum payments on each balance except the highest-rate loan. You also make an extra monthly payment based on how much you can put toward the debt.
The interest rate for Parent PLUS Loans first disbursed on or after July 1, 2024, and before July 1, 2025, is currently 9.08%. This rate is fixed for the life of the loan.