Refinancing. If you have good credit and enough household income to qualify, you may also be able to refinance your Parent PLUS loan to a lower interest rate through a private lender, which can potentially save you money.
If you wish to reduce or cancel a Grad PLUS loan more than 14 days after you have received the disbursement notification, you must contact your loan servicer directly. You can find out more about your loan history and loan servicer through “My Aid” on studentaid.gov.
While you may consolidate Parent PLUS Loans with a Federal Direct Consolidation Loan, refinancing is the only way to lower your interest rate or transfer a Parent PLUS Loan to the student. This option comes with a variety of pros and cons that you will want to explore before you make a decision.
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 are costlier and offer less flexibility than federals loans made directly to students. Here are the details: The interest rate and origination fee are both higher than student loans. If you want to defer payments until after your student graduates, you must contact the servicer.
Unlike other types of federal student loans, grad PLUS loans don't have a specific limit on how much you can borrow per year, nor do they have an aggregate limit. Instead, you might be able to borrow up to your school's certified cost of attendance, minus other financial aid you've received.
The main types of federal financial aid for graduate students are Direct Unsubsidized Loans, Graduate PLUS Loans, and (in some cases) Federal TEACH Grants. All three of these you can receive regardless of your income.
If you need to make any future adjustments to loan amounts, you must submit a completed and signed GRAD PLUS Loan Change form to the Financial Aid Office for processing.
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 a parent selected the maximum loan amount on the original Parent PLUS Loan application, an increase can be processed through the loan adjustment form.
The Bottom Line. Yes, borrowers with Parent PLUS Loans can have their debts forgiven after 10 years (or 120 eligible monthly payments) with the PSLF program.
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.
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.
Defaulting on a Parent PLUS Loan can lead to serious consequences, including wage garnishment, credit score damage, and the loss of federal benefits. But you can recover through loan rehabilitation or consolidation with the U.S. Department of Education.
Does my debt-to-income ratio, credit score, or employment status count against me when I apply for a PLUS loan? These factors aren't taken into account when credit history is reviewed. A lack of credit is not considered adverse credit.
Parent PLUS Loans can impact your credit score, but as long as you use the debt responsibly, you likely don't need to worry about anything negative in the long run. That said, there are other reasons to consider avoiding Parent PLUS Loans.
Parent PLUS Loans and Credit History
Unlike some other borrowing situations, applying for PLUS loans does not consider debt-to-income ratios, credit scores or employment status. The most essential factor is not having an adverse credit history.
There are two types of PLUS Loans: Grad PLUS Loans, which are available to graduate and professional students attending at least half time, and Parent PLUS Loans, which are available to parents of dependent undergraduate students attending at least half time. Both types of PLUS Loans require a credit check.
Note: You can request an increase in the amount of a Direct PLUS Loan you previously requested if it's for the same school and same award year. The loan can't exceed the cost of attendance (COA) minus other aid.
Yes, you can use Grad PLUS loans to cover your living expenses while at school. You must use your loan on education-related expenses, which can include housing, food, supplies, transportation and other costs related to attending school.
The parent, not the student, is responsible for repaying the PLUS loan. PLUS loans don't qualify for all of the income-driven repayment (IDR) plans that student loans do. PLUS loans have large borrowing limits, making it possible to take on too much debt.
Based on the information from Federal Student Aid, as of 2022, the average Parent PLUS Loan debt is $29,528. Although that might not sound like a huge amount, it depends on the parent's income.