You can't directly transfer a federal Parent PLUS loan to your child, but the only way to shift responsibility is through private loan refinancing, where your child takes out a new private loan to pay off the Parent PLUS loan, becoming responsible for the new debt. This process moves the debt from federal to private, losing federal benefits like income-driven repayment, and requires your child to meet credit and income criteria, potentially with a cosigner, to qualify with lenders like SoFi, ELFI, or PenFed.
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.
However, Parent PLUS Loans will be capped at $20,000 per student per year and a $65,000 lifetime limit beginning July 1, 2026. Parents who borrowed before that date can continue borrowing under the current limits for up to three additional years or until their student completes their program. Good news.
Yes, Parent PLUS loans can be forgiven or discharged, but it often requires specific actions like consolidating the loan into a Direct Consolidation Loan to access Income-Contingent Repayment (ICR) or Public Service Loan Forgiveness (PSLF), or by meeting criteria for total and permanent disability discharge or death. Forgiveness pathways are limited compared to other federal loans, primarily relying on the 25-year ICR plan or PSLF if the parent works in public service, as Parent PLUS loans don't directly qualify for most other income-driven plans.
The government doesn't forgive Parent PLUS Loans when you retire or draw Social Security benefits, but it has programs that will wipe out your remaining balance after you've made a number of student loan payments under an income-driven repayment plan.
Transferring a Parent PLUS loan to a student involves refinancing through a private lender. The student must apply for a new loan to pay off the Parent PLUS loan. Once refinanced, the student becomes responsible for the new loan's repayments. Refinancing can potentially lower the interest rate and monthly payments.
You will lose repayment plan options and restart the clock on PSLF and other forgiveness programs. You can learn more about the consolidation process here . Act quickly to avoid default. Default can result in consequences like garnishment of your wages, federal tax return, or Social Security.
Summary: Transferring Parent PLUS loans into the student's name isn't possible with a Direct Consolidation Loan, but it can be accomplished by refinancing through a private student loan refinance lender.
The "7-year rule" for student loans generally refers to when negative marks, like defaults, are removed from your credit report (around 7 years after the first missed payment or default date for federal loans, 7.5 years for private loans), but the debt itself doesn't disappear and must be paid off; it's also a benchmark in bankruptcy proceedings where federal loans can become dischargeable after 7 years from when payments were due, though proving "undue hardship" is required and difficult.
Parent PLUS Loans are forgiven when the parent or the child from whom they borrowed the loans dies. Your surviving family members can't inherit the debt. Before that day comes, there are other opportunities to get rid of your student loan debt.
Parent PLUS loans are not eligible for any of the income-driven repayment (IDR) plans in and of themselves. You can, however, consolidate the Parent PLUS loans to a Direct Consolidation Loan at which point the borrower gains access to one of the IDR plans, but only one – the income contingent repayment plan (ICR).
Credit score: In general, you will need to have good to excellent credit, a FICO score of 680 or higher, to qualify. An excellent credit score paired with a high income will likely give you the fastest path to approval. Income: Lenders may set specific income requirements for you to qualify.
Can the loan be transferred to the student? No, a Direct PLUS Loan made to a parent cannot be transferred to the child. You, the parent borrower, are legally responsible for repaying the loan.
Some of the most common FAFSA errors are: Leaving blank fields: Too many blanks may cause miscalculations and an application rejection. Enter a '0' or 'not applicable' instead of leaving a blank. Using commas or decimal points in numeric fields: Always round to the nearest dollar.
How Can Parent PLUS Loans Be Discharged?
Under this loan program, parents may borrow up to the cost of education at a particular institution minus any financial aid a student receives. Repayment of a PLUS Loan begins within 60 days of final disbursement and can take up to 25 years based on the total outstanding balance.
Are student loans forgiven when you retire? No, the federal government doesn't forgive student loans at age 50, 65, or when borrowers retire and start drawing Social Security benefits.