Parent PLUS Loan Consolidation: What You Need to Know

#1 Student loan lawyer

Updated on January 3, 2024

Parent PLUS Loan consolidation could be the solution if you’re looking to simplify your payments and possibly lower them each month. It might also make you eligible for certain student loan forgiveness programs that can wipe out your loan balance if you work for the government or nonprofit or make payments for 25 years.

But consolidation won’t reduce your interest rate, speed up your loan payoff, or allow you to transfer the debt. For those goals, refinancing with a private lender might be the answer.

Ahead, we’ll explore the ins and outs of Parent PLUS Loan consolidation and help you decide whether it’s the right move for your family.

Note: This article is about Parent PLUS Loan Consolidation. For information on the Double Consolidation Loophole, see Double Consolidation Loophole.

Benefits and Drawbacks of Consolidating Parent PLUS Loans




1. Eligibility for Plans

May make you eligible for better repayment options and forgiveness programs like IDR and PSLF.

Not all borrowers will gain from the latest Department of Education’s plans.

2. Simplification

May make you eligible for better repayment options and forgiveness programs like IDR and PSLF.

Interest capitalization may increase the total amount paid over the life of the loan.

3. Interest Rate

Fixed interest rate for the life of the consolidated loan.

Won’t reduce your interest rate.

4. Specific Servicer

You may choose a particular servicer based on preferences.


Can You Actually Consolidate Parent PLUS Loans?

Yes, you can consolidate Parent PLUS Loans. This process combines your federal education loans into one Direct Consolidation Loan, making monthly payments simpler.

Plus, consolidation may make you eligible for better repayment options and President Biden’s latest student loan forgiveness program, the IDR Account Adjustment, and Public Service Loan Forgiveness Waiver.

Related: Can Parent PLUS Loans Be Consolidated With Other Student Loans?

Understanding When to Consolidate Parent PLUS Loans

Deciding to consolidate depends on your unique situation. Benefits may include lower monthly payments through ICR and eligibility for PSLF. But not all borrowers will gain from the latest Department of Education’s repayment plans. It’s wise to consult a student loan expert for personalized guidance.

Who Really Benefits from Parent PLUS Loan Consolidation?

Consolidating Parent PLUS Loans is not a one-size fits all solution. It can be a strategic move depending on your financial situation and goals.

Here’s who should consider this option:

  1. Parents with Multiple Federal Loans: If you have several federal loans, including Parent PLUS Loans, consolidation can simplify your repayment process by combining them into a single loan.

  2. Seeking Specific Repayment Plans: If you’re interested in accessing Income-Contingent Repayment plans or income-based repayment forgiveness, consolidation might be a necessary step. And if you’re looking for even better repayment options, check out the double consolidation loophole before it closes.

  3. Looking for a Specific Servicer: You may choose a particular servicer for your consolidated loan if you have preferences based on customer service or other factors.

How to Consolidate Parent PLUS Loans

Are you considering consolidating your Parent PLUS Loans? Here’s a step-by-step guide:

  1. Verify Your Eligibility: Check if your Parent PLUS loans can be consolidated. Federal Direct Loans, including Parent PLUS Loans, meet the eligibility requirements so long as you have another federal loan to combine it with.

  2. Visit the Federal Student Aid Website: To start, go to the Student Loan Consolidation page on Here you’ll find comprehensive details about the process and the application form.

  3. Select a Loan Servicer: The Department of Education works with specialized private companies, such as Aidvantage, EdFinancial, MOHELA, Nelnet, or OSLA, for the federal consolidation process. You’ll have the opportunity to select one of these servicers when you apply.

  4. Complete the Application: Fill in the required details, including your personal information and the loans you want to consolidate.

  5. Choose a Repayment Plan: You’ll be able to pick the Income-Contingent Repayment plan, which bases your payments on your discretionary income.

  6. Submit the Application: After filling out the application, send it in for review.

Related: Are Parent PLUS Loans Eligible for Income-Based Repayment?

Hidden Pitfalls of Parent PLUS Loan Consolidation

Parent PLUS Loan consolidation offers many benefits, but it’s essential to understand the restrictions, limitations, and timing considerations that may apply.

Here’s what you need to know:

1. Combining Parent PLUS Loans with Other Loans

  • With Student Loans: Parent PLUS Loans can be consolidated with other federal student loans in the parent’s name. But they cannot be combined with loans that are in the child’s name.

  • With Private Loans: Parent PLUS Loans can be consolidated only with other federal loans. Combining them with private student loans is not an option under the federal Direct Consolidation Loan program.

2. Consolidating Multiple Times

  • Reconsolidation: While you can consolidate Parent PLUS Loans more than once, doing so may affect your eligibility for certain benefits or forgiveness programs.

  • Interest Capitalization: Repeatedly consolidating may lead to interest capitalization, where outstanding interest is added to the principal balance, potentially increasing the total amount you pay over the life of the loan.

3. Other Limitations

  • Spouse Consolidation: Two parents can consolidate the Parent PLUS loans they borrowed separately, but they cannot combine the loans into one or transfer the loans to the other spouse.

  • Consolidation Timing: Consider the timing of consolidation carefully, as consolidating too early or too late may impact your eligibility for certain repayment plans or forgiveness options.

Understanding Interest Rates During Parent PLUS Loan Consolidation

Know how interest rates work with Parent PLUS Loans to guide your financial choices.

Here’s a breakdown:

  • Interest Rates in Consolidation: Consolidating won’t likely lower your interest rate. The new rate is a weighted average of the existing loans’ rates. Your new loan will have a fixed interest rate for the life of the loan.

  • Interest Rates for New Direct PLUS Loans: For new Direct PLUS Loans, the fixed rate is 8.05% for specific disbursement dates. Key Takeaway: The government sets a fixed rate for new loans during a defined period.

  • Refinancing Option: You might lower your rate by refinancing with a private lender, but you’ll lose federal benefits and protections like access to the ICR plan, forbearance, and deferments. Related: How to Defer Parent PLUS Loan

  • Concerns About Interest Growth: Parent PLUS Loans’ higher interest rates cause concern. Refinancing might lower rates, but you’ll lose access to specific repayment plans and forgiveness programs.

  • Potential Risks of Refinancing: Refinancing might lead to temporary solutions if payment struggles arise, with risks to your credit and financial stability. Key Takeaway: Understand the risks of refinancing, including potential credit damage and loss of flexibility.

Optimal Timing and Limitations for Consolidating Parent PLUS Loans

The decision to consolidate Parent PLUS loans is a personalized one, influenced by your individual financial circumstances and objectives. Here’s what to consider:

  • Timing Considerations: If you aim to lower payments, access IDR Plans, or pursue forgiveness, consider this path.

  • Limitations for Parents: While two parents can consolidate the Parent PLUS loans they borrowed separately, there are restrictions. They cannot combine the loans into one or transfer the loans to the other spouse. Understanding these limitations is vital when considering consolidation.

Your Best Options for Refinancing Parent PLUS Loans

Refinancing your Parent PLUS loans involves replacing them with a new loan from a private lender, often at a lower interest rate.

This can be an attractive option if you’re looking to lower your monthly payments, reduce the overall interest paid, or transfer the loan responsibility to your child.

But student loan refinancing also means giving up certain federal loan benefits, such as income-driven repayment plans and loan forgiveness.

Top-Rated Lenders for Parent PLUS Loan Refinancing


Fixed APR Range

Variable APR Range


1. Earnest

4.99% to 9.99%

5.99% to 9.99%

0.25% Autopay discount

2. SoFi

4.99% to 9.99%


Career planning, job search assistance, support for entrepreneurs.

3. Laurel Road



Interest rate discounts, flexible loan repayment terms.

4. College Ave

4.42 - 16.99%


Customizable interest rates and loan terms.

5. Citizens Bank

Starting at 6.80%

Starting at 6.83%

Repayment periods lasting from 5 to 20 years

6. Advantage Education Loan



Longer forbearance time than many lenders

Important Considerations When Refinancing

  • Compare Options: Shop around and compare refinance interest rates, fees, and repayment plans from different lenders to identify the best fit for your situation. You’ll need a good credit score and enough income to cover your student loan payments and expenses to get the best rates. Otherwise, you’ll need a cosigner with both.

  • Understand the Trade-Offs: Refinancing federal loans into private ones means losing specific federal benefits. Carefully consider these factors before proceeding, including the loss of income-based payment plans, forbearance, and forgiveness programs for your current loan.

Bottom Line

Parent PLUS Loan consolidation and refinancing are significant decisions that can transform your family’s financial future. These options can feel overwhelming to navigate, especially when you’re striving to do what’s best for your child’s education.

Know your options, loan amount, and credit history to manage your debt well.

We recognize the unique challenges and concerns that come with managing student loan debt as a parent. That’s why my team and I specialize in helping parent borrowers find the best solutions for Parent PLUS Loans.

Whether you’re seeking to lower your monthly payments, access new repayment plans, or simply need guidance on the best path forward, we’re here to support you.

Book a call with us today, and we’ll work together to develop a personalized strategy that aligns with your unique situation. Your path to financial peace of mind starts with a simple conversation.

UP NEXT: Parent PLUS Loan Repayment Options

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