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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 are similar to other federal student loans, but forgiveness options are 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, and borrowers must meet certain requirements for each option, such as making 120 payments or working for a qualifying employer. Depending on the circumstances, student loan discharge is an alternative for borrowers who don’t qualify for forgiveness, but this option also carries its own requirements that must be met.
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, and anyone can apply for the ICR Plan, regardless of income.
For the ICR Plan, your monthly payments are equal to 20 percent of your discretionary income divided by 12 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.
Since monthly payments are based on income and family size, you must recertify every year, which requires you to provide updated income information so your payment amount can be recalculated. If there are changes to your income before your annual recertification, income documentation can be provided to your loan servicer so adjustments can be made to your payment amount.
Parent PLUS loans 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 for 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 and extra payments do not count toward the 120 qualifying payments).
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 yearly 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 scenarios where your student loans could be discharged, including:
- School closing.
- Total and permanent disability.
Although student loans can be discharged in bankruptcy, it is rare. You could also receive a loan discharge if your child’s school falsely certified 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.
PLUS loan forgiveness is limited, but it is possible. Even if your PLUS loan isn’t eligible for a program, borrowers have seen many changes to student loan repayment and forgiveness programs in recent years, making it possible for more loans to be forgiven. That being said, it may only be a matter of time before you qualify for forgiveness and finally rid yourself of this debt.