Direct PLUS Loans for parents, more commonly referred to as parent PLUS loans, are the only type of federal student loan available to parents of college students. They have many of the same features as other federal student loans, but forgiveness options are slightly more limited. If you have a parent PLUS loan, you can only get student loan forgiveness through Public Service Loan Forgiveness or the Income-Contingent Repayment plan.
Parent PLUS loan forgiveness options
If you’re exploring parent PLUS loan forgiveness, there are a few different ways to go about it, depending on your situation.
Income-Contingent Repayment Plan
The Income-Contingent Repayment (ICR) Plan is a type of income-driven repayment plan. These plans base your monthly payments on your income and household size.
For the ICR Plan, your monthly payments are either 20 percent of your discretionary income or what you’d pay on a repayment plan with a fixed payment over the course of 12 years, according to your income — whichever is less. You’ll make payments for 25 years; after that, the remaining balance on your student loans is forgiven.
Parent PLUS loans themselves are not eligible for the ICR Plan, but you can qualify if you first consolidate your parent PLUS loans into a Direct Consolidation Loan.
Public Service Loan Forgiveness
Public Service Loan Forgiveness (PSLF) is a program available to parent borrowers. You’ll need to meet the following criteria:
- Work full time at a qualifying employer, like a government entity or nonprofit.
- Repay your loans on the Income-Contingent Repayment Plan.
- Make 120 qualifying payments (these do not have to be consecutive).
Keep in mind that you don’t have to hold a specific job title at your qualifying employer, you just have to work at one that offers PSLF. You can work for a federal, state, local or tribal government, or for a nonprofit. Military service also qualifies.
You can complete a PSLF certification every year to prove that you’re still eligible for PSLF and on track to receive forgiveness. When you’re ready, you can submit your application for forgiveness.
Student loan discharge can happen as a result of extenuating life circumstances. While it’s not the same as student loan forgiveness, it will wipe away some or all of your student loan balance. There are a few different scenarios where your student loans could be discharged, including:
- Total and permanent disability.
- School closing.
You could also receive a loan discharge if your child’s school falsely certifies your eligibility to receive the loan, your loan is falsely certified through identity theft or your child withdraws from their school and the institution doesn’t refund the loan money.
Other ways to get help with parent student loans
If you’re struggling to make payments on parent PLUS loans and don’t qualify for these forgiveness or discharge opportunities, you might have some other options.
Deferment or forbearance
Parents who take out federal student loans on behalf of their child are eligible for federal forbearance and deferment. In these periods, you can pause student loan payments for a specified amount of time, though interest may continue to accrue.
Forbearance and deferment are typically granted based on specific extenuating circumstances, like illness or financial hardship. You’ll need to submit an application for most forbearances and deferments, and you’ll be subject to lifetime limits.
Some employers offer student loan payment matching programs up to a certain dollar amount. This option may be listed in your employee handbook, but if it’s not, talk to your HR partner about what options you have.
Some states and organizations also offer student loan repayment assistance programs. For instance, the California State Loan Repayment Program (SLRP) helps pay the loans of physicians, dentists, midwives, pharmacists and others in the health care field. You’ll need to work full time for at least two years or part time for at least four years in the state. Award amounts vary by year and employment status.
There are some military repayment programs as well. Eligibility depends on the program and the service member. For instance, the National Guard student loan repayment program awards up to $50,000 to help pay off your student loans.
Refinancing is when you take out a new loan with new terms and a new interest rate and pay off all of your current loans. Then you make one payment to your new, refinanced loan. This can only be done through private student loan lenders, meaning you’ll lose federal benefits like Public Service Loan Forgiveness and Income-Contingent Repayment. However, refinancing can streamline your loan payments and possibly get you a lower interest rate or monthly payment.
Refinancing is also the only way to transfer the parent PLUS loan to your child. Not every student will qualify for a refinancing loan on their own — meaning you may still need to be a co-signer on the loan — but it’s a viable option for offloading some of the responsibility of the loan.