Direct PLUS Loans for parent borrowers are eligible for the following repayment plans: Standard Repayment Plan, Graduated Repayment Plan, and Extended Repayment Plan.
Short answer, no, Parent PLUS loans do not qualify for eligibility in forgiveness programs. However, parents can first consolidate with the Federal Direct Consolidation Loan program, then apply for forgiveness programs.
But, Federal Parent PLUS loans are not directly eligible for income-driven repayment plans. Instead, one must consolidate the Federal Parent PLUS loans into a Federal Direct Consolidation loan. The consolidation loan is then eligible for income-contingent repayment.
Parent PLUS loans are not eligible for IBR, PAYE, or REPAYE. However, you can consolidate them into a Direct Consolidation Loan to repay them under the Income-Contingent Repayment (ICR) plan. Click here and here for information about the pros and cons of consolidating.
Stick to the standard repayment plan
You can pay less each month under other parent PLUS loan repayment options, such as extended repayment or Income-Contingent Repayment. But these plans lower your bills by increasing your repayment term, so standard repayment is the fastest option for repaying parent loans.
Any outstanding balance on your loan will be forgiven if you haven't repaid your loan in full after 20 years or 25 years, depending on when you received your first loans. You may have to pay income tax on any amount that is forgiven.
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.
Interest accrues while the student is in school, but parents can choose to pay the interest as they borrow.
You monthly payment will be 0$ if your AGI is less than 150% of the federal government's established poverty line of $12,880 in 2021. That means your income would have to be under $19,320.
If you took out a federal parent PLUS loan for your child's education, you don't have to start paying it back right away. Parent PLUS loan deferment is available until your child graduates or drops below half-time enrollment, as well as in the six months after. Interest will accrue on the loans during a deferment.
The Parent PLUS loan application is based on the borrower's credit history; no loan officer will look at your income or other debt, or otherwise evaluate whether you can afford to make the payments. It is your responsibility to make sure you aren't borrowing more than you can afford to pay back.
Public Service Loan Forgiveness
Bottom line: After 10 years, you could see forgiveness of your Parent PLUS Loan (now technically a Direct Consolidation Loan). And here's more good news: Under PSLF, your forgiven loans are never considered taxable income.
How to refinance parent PLUS loans. You have two options to refinance parent PLUS loans: keep the student loan in your name, or transfer it to your child. No matter which you choose, a refinance lender will pay off your existing parent PLUS loan and issue a new private loan with new terms.
If you have a parent PLUS loan, you are entitled to the same student loan relief options as other federal student loan borrowers: Payments on most parent PLUS loans are automatically suspended without interest through May 1, 2022.
Direct PLUS Loans are federal loans that parents of dependent undergraduate students can use to help pay for college or career school. PLUS loans can help pay for education expenses not covered by other financial aid.
But when it comes to student loan debt and divorce, the person who took out the loan is typically responsible for paying the loan, even in divorce. Only one of the spouses can sign the promissory note on Parent PLUS Loans, so technically that's who is responsible for the student loan in the case of divorce.
1. You can borrow as much as you need. Unlike other types of federal student loans, Parent PLUS Loans have virtually no limits when it comes to borrowing. You can borrow up to the cost of attendance minus any other financial aid received.
In most cases, an individual's debt isn't inherited by their spouse or family members. Instead, the deceased person's estate will typically settle their outstanding debts. In other words, the assets they held at the time of their death will go toward paying off what they owed when they passed.
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. Defaulted loans also aren't eligible for different repayment plans, or deferment or forbearance.
Undergraduate loans are forgiven after 20 years, while graduate school loans are forgiven after 25 years.
The federal government doesn't forgive student loans at age 50, 65, or when borrowers retire and start drawing Social Security benefits. So, for example, you'll still owe Parent PLUS Loans, FFEL Loans, and Direct Loans after you retire.
If you borrowed money in the form of a Parent PLUS Loan to finance your child's college education, then you may be wondering if you qualify for any tax breaks. Good news: As a Parent PLUS borrower, you are eligible to claim the Student Loan Interest Deduction on your taxes.