No, unless you default, the servicers of federal loans (including Parent PLUS) do not have the authority to settle them for less or negotiate a custom repayment plan.
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.
A parent can obtain a PLUS Loan for each child in each school year. You can obtain additional PLUS Loans for any year that you have an eligible child in school.
Get additional Direct Unsubsidized Loans.
If you're a parent and you're unable to get a PLUS loan, your child may be able to get additional unsubsidized loan funds. Normally, a dependent student can't get as much unsubsidized loan funding as an independent student can.
If there is money left over, the school will pay it to your parent, usually by check. In some cases, with your parent's permission, the school may disburse the leftover money to you.
If you want to increase or decrease your loan amount, we might be able to help. Availability to change the loan amount depends on the status of your application. Please contact us to find out if you're eligible to change the loan amount. Chatting with us will result in the quickest response.
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.
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.
However, two parents can each apply for separate Parent PLUS loans for a single child, so long as the combined loan amounts do not exceed the annual limit. The annual PLUS loan limit is equal to the cost of attendance minus other aid received.
As a parent PLUS borrower, can I transfer responsibility for repaying the loan to my child? No, a Direct PLUS Loan made to a parent cannot be transferred to the child.
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).
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. There are no ability-to-repay standards for PLUS loans.
If a parent selected the maximum loan amount on the original Parent PLUS Loan application, an increase can be processed through the loan adjustment form.
If you can't pay off the loan immediately, you have two options: rehabilitation and consolidation . Rehabilitation: After 9 months of reasonable payments (based on your income), your loan will be in good standing. Rehabilitation removes the default note from your credit report.
To qualify, borrowers must have a dependent child enrolled at least half time in an eligible school. Unfortunately, grandparents and other relatives can't get a parent PLUS loan unless they legally adopt the student. While you don't need excellent credit to get a PLUS loan, you can't have an adverse credit history.
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.
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.
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.
The annual limit on a Federal Direct Parent (PLUS) Loan is equal to LMU's Estimated Cost of Attendance minus any other financial aid you receive. For example, if your cost of attendance is $10,000, and you receive $6,000 in other financial aid, your parents can borrow up to $4,000.
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.
The loan can't exceed the cost of attendance (COA) minus other aid. If your financial situation has changed, you can submit a Free Application for Federal Student Aid (FAFSA®) Form Correction. Learn more about correcting or updating your FAFSA form.
Request additional federal student loans.
If you've exhausted other options, you can consider borrowing additional federal student loans. If you're a dependent student, your parent can apply for a Direct PLUS Loan for parents. Most schools use our online application, but others may have their own application.
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.