Q: Are both parents responsible for a Parent Plus Loan?

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Both parents are not responsible for a Parent Plus Loan. The parent who borrowed the loan for the student borrower is the sole borrower responsible for paying back the loan. Neither the student borrower nor the other parent is responsible for the loan.

On top of that, there's no way for the student borrower or the other parent to become legally responsible for the loan. The parent who borrowed the loan is stuck with the debt until they pay the loan back or they die, whichever comes first.

Can I transfer a Parent Plus Loan to a student?

You cannot transfer Parent Plus Loans to a student using federal student loans.

Stated differently, the U.S. Department of Education doesn't offer federal student loan options that allow a Parent Plus Loan borrower to transfer the parent loan to their child.

Because of that, if you want your child to be legally responsible for paying back the Parent Plus Loan, look outside of the federal student aid system to the private student loan market.

You can transfer a Parent Plus Loan to your child if your child can get approved for a loan amount to refinance the Parent Plus Loan into a private student loan.

For this to happen, your child will likely need to pass a credit check, which means they'll need to have a solid credit history. If they don't, they'll need a creditworthy cosigner. And who are they going to get for that?

Click here to learn How to Remove a Cosigner From a Student Loan

If one parent refuses the Parent Plus Loan, can the other parent step in?

Sure, if one parent refuses to pay the Plus Loan, the other parent could step in to pay back the debt. But I'm not sure why the other parent would do it.

What benefit would you gain in taking responsibility for their federal student loan debt? Sure, if they stop paying the loan, bad things can happen to them. Their wages could be garnished. Their Social Security benefits could be offset. Their tax refund could be taken. But you, your child? You both would be fine. The government couldn't come after you to collect the student loan debt.

The only reason I could see why you'd want to make the payments for the loan is to make sure the parent remains eligible to borrow more loans.

To get a Parent Plus Loan, the parent has to not have an adverse credit history (basically, they can't have late payments or be in default on debts).

If you wanted that parent to remain eligible to borrow a Direct Parent Plus Loan and they were refusing to pay the loan, then you would agree to make the payment for them. (That scenario seems odd to me. If they're refusing to pay back the loan, why would the parent borrower agree to borrow another student loan?)

Can I consolidate my student loans with my Parent Plus Loan?

​You can consolidate your other federal student loans with your Parent Plus Loan. But just because you can do it doesn't mean you should do it.

Here's what I mean:

Your non-Parent Plus Loans are eligible for all of the income-driven repayment plans.

Your Parent Parent Plus Loan, on the other hand, are eligible only for the income-contingent repayment plan.

If you consolidate your Parent Plus Loans with your other student loans, then the new Direct Consolidation Loan is eligible only for the income-contingent repayment plan.

What if you can't afford the monthly repayment amount?

There's only one option when you can't afford the monthly payment amount on your Parent Plus Loan: loan consolidation.

In their current status, a federal Parent Plus loan isn't eligible for a monthly payment based on your income. To qualify for a repayment plan based on your income, you'll need to consolidate them into a Direct Parent Plus Consolidation Loan.

The new loan will be eligible for a payment plan based on your income.

Another option is to refinance Parent Plus Loans with a private lender.

The benefit of refinancing is that you may get a lower interest rate and lower monthly loan payments.

Both of those things can help repaying the loan easier.

But the tradeoff is that you'll lose eligibility for income-driven repayment plans, forbearances/deferments, and loan forgiveness programs like the Public Service Loan Forgiveness (PSLF) Program.

Nerdwallet has put together a solid list of student loan refinancing options for Parent Plus Loans in 2021.

FYI: Many of these lenders will do a soft-pull of your credit report to check your credit score, debt-to-income ratio, etc. Many also require that your child has received their bachelor's degree.

Click here to read more about The Best Repayment Option for a Parent Plus Loan

Are Parent Plus Loans forgiven when you retire?

There's no loan forgiveness option for a Parent Plus Loan or any other Direct Loan simply because you retire.

Your best bet at loan forgiveness is to make 240+ monthly payments under the income-contingent repayment plan.

The federal government will forgive the remaining balance due on your Parent Plus Loan after you make 240 (or 300 if the loans were for graduate school) monthly payments.

Twenty years is a long time to have to make payments for any type of debt, including a house.

But unless you work for the government or nonprofit (in which case, you'd qualify for the Public Service Loan Forgiveness program) loan forgiveness after 20 years is the best you'll get.

Click here to read Loan Forgiveness Options For Senior Centers Entering Retirement

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