Parent PLUS Loan Repayment Options: Guide for Families

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Stanley tate

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You helped your child pay for college by taking out high-interest federal Parent PLUS Loans. Now, you need to choose the best Parent PLUS Loan repayment option for your personal finances and goals, like getting out of debt quickly, saving for retirement, or qualifying for loan forgiveness. Thankfully, there are several repayment options for Parent PLUS Loans.

Use this guide to find the right Parent PLUS Loan repayment strategy for you.

Parent PLUS Loan Repayment Options

Unlike other federal student loans, Parent PLUS Loans start repayment immediately after the student graduates or drops below half-time enrollment. Here are your repayment options:

  • 10- Year Standard Repayment Plan - typically gives parent loan borrowers the highest monthly payment amount and pays the least interest over time.
  • Extended Repayment Plan - allows borrowers with loan amounts of $30 thousand or more to get a fixed or graduated payment over a 25 year repayment period.
  • Graduated Repayment Plan - starts your monthly payments off low and then increases the payment every two years until paid in full. Your repayment term can be 10-30 years, depending on your loan balance and whether you consolidated.
  • Income-Contingent Repayment - allows parent borrowers to get a payment amount that’s based on their discretionary income. To qualify, you’ll need to have a consolidation loan made under the Direct Loan Program. Given the high fixed interest rate of parent loans and the minimum payments under the ICR plan, your loan balance will increase more under this plan than the other plans.

If you can’t pay your Parent PLUS Loans in the short term, contact your student loan servicer and request a deferment or forbearance.

How to Pay Back Parent PLUS Loans quickly?

The two best options to quickly pay back Parent PLUS Loans is to refinance for a lower interest rate or stay in the Standard Repayment Plan.

Refinance for a lower interest rate

If you want to quickly pay off parent PLUS loans, refinance for a lower interest rate. You’ll get out of debt faster and save money in interest. You can refinance parent PLUS loans in your name, or the child you borrowed the loan can refinance the loan in their name.

To qualify, you’ll need good credit and enough income to cover your monthly expenses (mortgage, credit cards, and other student loan debts) and debt payments.

Stay in the Standard Repayment Plan

If refinancing isn’t an option, making payments on the 10-Year Standard Repayment Plan is the best option to pay off your Parent PLUS Loans fast. To get rid of your student loan debt faster, make extra student loan payments towards your principal balance.

How to lower Parent PLUS Loan payments?

There are three options to lower Parent PLUS Loan payments:

  • switch to the Extended or Graduated Repayment plans
  • consolidate and switch to the ICR plan
  • refinance with a private lender

The Extended and Graduated Repayment plans lower your payments by giving you a longer repayment schedule of up to 30 years. For many parent borrowers, the ICR plan is the best way to lower monthly payments. The plan looks at your family size and adjusted gross income to determine how much you can afford to pay each month.

Refinancing a parent loan can lower your payments by getting a lower interest rate and better repayment terms. Unlike consolidation, student loan refinancing isn’t automatic. You have a pass a credit check. While you don’t need excellent credit, you can’t have an adverse credit history.

Before refinancing, be aware that you give up Parent PLUS Loan forgiveness options when you refinance with a private lender.

Can Parent PLUS Loans be consolidated?

Parent PLUS Loans can be consolidated into a new Direct Consolidation Loan. If you’ve already consolidated, you may consolidate a second time if you have an FFEL Consolidation Loan or another loan to add to the consolidation loan.

What is student loan consolidation?

A Federal Direct Consolidation Loan combines multiple federal loans into a new Direct Consolidation Loan through the Department of Education. Borrowers typically consolidate to gain eligibility for a loan repayment plan or student loan forgiveness program. Consolidation won’t lower your interest rate. However, it can make your monthly payments more affordable — especially if you have Parent PLUS Loans.

How to consolidate Parent PLUS Loans

Step 1: Log in to studentaid.gov

You’ll need a Federal Student Aid ID to apply online for a Direct Consolidation Loan. You may already have an FSA ID from when you applied for FAFSA. Once logged in to studentaid.gov, click “Manage Loans” and then “Consolidate My Loans”.

Step 2: Choose loans to consolidate

You can consolidate some or all of your federal student loans, including the loans you borrowed for your own college education. However, if you combine parent PLUS Loans with other federal student loans, you’ll lose access to the Revised Pay As You Earn (REPAYE), Pay As You Earn (PAYE), and Income-Based Repayment (IBR) Plans.

Step 3: Choose a repayment plan

You can choose a repayment option based on paying your loan balance in full over time or one that ties payments to income. If you pick an income-driven repayment plan, you’ll be asked to import your tax return from IRS.gov. You’ll also need to fill out an Income-Driven Repayment Plan Request Form.

Step 4: Read the loan terms

Before submitting the form online, you’ll have a chance to review your contact information, the loans you’re consolidating, and the Master Promissory Note. The interest rate for the consolidation loan will be the weighted average of the loans included in the application. After submitting the form, keep making student loan payments as usual until your servicer confirms it has completed the consolidation.

Step 5: Review the loan summary

A few weeks after you submit your loan application, the loan servicer will send you a statement showing your new interest rate, loan balance, repayment plan, and payment amount. Review that letter to make sure everything is in order.

How to transfer a Parent PLUS Loan to the student?

Parents often cover the cost of attendance not met by their child’s financial aid with the understanding their child will make the payments on the Direct PLUS Loan when they start working full-time. Despite that agreement, the parent owes the debt.

If you want to transfer Parent PLUS Loans to the student, refinancing with a private lender is your only option. Not all refinance lenders will allow the student to refinance the loans into their name, but several do. To qualify, the student must have:

  • a good credit score (~680+)
  • a low debt-to-income ratio
  • a stable income that allows them to cover their current expenses and the new loan.

Refinancing a parent loan turns the debt into a private student loan, which is ineligible for loan forgiveness and income-based repayment options offered by the federal government.

How to get Parent PLUS loan forgiveness?

Parents qualify for two main loan forgiveness programs: repayment plan-based forgiveness and the Public Service Loan Forgiveness Program.

Repayment Plan Based Forgiveness - 25 years

Parent borrowers in an income-contingent repayment plan qualify for loan forgiveness after making 300 monthly payments. After your final qualifying payment, the U.S. Department of Education will forgive the remaining principal and interest owed on your loan. Typically, you would have to pay taxes on the amount forgiven. However, the government temporarily changed the law through 2026 so borrowers could avoid tax liability.

Public Service Loan Forgiveness - 10 years

Parents who work full-time in public service can get their federal student loan debt forgiven. To qualify, you have to work for the government or a nonprofit organization and make 120 monthly payments. Forgiveness under PSLF is not treated as taxable income.

Trouble with your Parent PLUS loans? Reach out.

If you want to go over your options, schedule a free 10-minute phone call with me. I’ve got years of experience helping people like you with their student loans.

Reach out. I can help you rethink or repay your Parent Plus Loan in a way that works for you and your family.

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