Are you a parent of a college student? Are you struggling to pay off your Parent PLUS Loans? If so, you may be eligible for parent student loan forgiveness.
What is Parent Student Loan Forgiveness
As part of the borrower benefits offered in the federal student loan program, there are student loan forgiveness options offered by the U.S. Department of Education. Each forgiveness option requires a borrow to meet certain criteria to qualify. The main eligibility criteria for this program are that the borrower (including parent borrowers) hold a federal Direct Loan.
Public Service Loan Forgiveness (PSLF): This program offers loan forgiveness after 120 qualifying monthly payments while working full-time at an eligible employer (any type of government, or 501(c)(3) nonprofit organization), while repaying your loan under an eligible repayment plan. Eligible jobs typically include government employees, teachers, nurses, military personnel, firefighters, police officers, social workers, etc. After making the required payments, and submitting an application to verify you met all the criteria, any remaining balance on your loan can be forgiven.
Outside of PSLF, parent student loan forgiveness is not common. Some more practical solutions to dealing with financial hardship related to student loans are to visit your repayment options and see if you need to modify them to better suit your circumstances.
Repayment Plans Available To Parents with PLUS Loans
There are several different repayment plans available to parents with Parent PLUS Loans:
Standard Repayment Plan: This plan is the standard option for Parent PLUS loans. This plan requires fixed monthly payments over a 10-year period. The monthly payment amount is based on the total loan amount and interest rate. While this plan may offer higher monthly payments than other options, it may also result in lower overall interest costs due to its shorter repayment term.
Graduated Repayment Plan: This plan offers lower initial payments that increase every two years over a 10-year period. This plan may be beneficial for those who anticipate an increase in income over time. There are some limits to how much your payments can increase, but no one payment can be 3x more than any other payment. That basically means, if you start with payments that are $100/month, you payments will not be more than $300/month by the end of your repayment term. This payment plan can be a little more expensive than your standard fixed payment 10-year plan, but the overall interest costs will be low compared to plans with longer repayment terms.
Extended Repayment Plan: This plan allows borrowers to extend their repayment period up to 25 years, which results in lower monthly payments but higher total interest costs over time. The interest rate will remain fixed throughout the life of the loan. This plan may not be an option for everyone, you need to have an outstanding balance of at least $30,000 in Direct Loans to qualify.
Income-Contingent Repayment Plan (kind of): This is the only income-driven repayment plan that will allow the repayment of a Direct Consolidation Loan which was used to pay a Direct PLUS Loan made to a parent. Meaning, if you have a parent Direct PLUS Loan, you do need to qualify to consolidate your loan with a Direct Consolidation Loan. Income-driven repayment plans allow borrowers to base their payments on their income rather than their outstanding loan balance. This plan will require you to pay the lesser of 20 percent of your discretionary income, or the amount you would pay on a repayment plan with a fixed payment over 12 years. If your payment is 20 percent of your discretionary income, and you get a raise, your payment could be more than what your payment would be under a 10-year standard repayment plan. After you have made payments for 25 years, any remaining balance will be forgiven.
Direct Consolidation Loan: You may choose to consolidate your parent Direct PLUS Loan with your other types of federal student loan debt. You will be eligible to repay your loans with a Standard or Graduated Repayment plan, however, your repayment term could be as long as 30 years depending on your outstanding educational debt. And as discussed before, you may be eligible to repay your student loan under an income-contingent repayment plan. However, it’s wise to determine the best method to consolidate your federal student loans together. By including a Direct Parent PLUS loan in a Direct Consolidation Loan, you will be limited to repay that loan with an income-contingent repayment plan. However, you can have more than one Direct Consolidation Loan, so you may want to use some strategy
When considering which repayment plan is right for you, it's important to understand the interest rates associated with each option as well as the loan terms and conditions that apply. It's also important to consider loan consolidation, forgiveness programs, and deferments if they are available through your lender or servicer
Loan consolidation can help reduce your monthly payments by combining multiple loans into one single loan with one payment each month; however, it can also extend your repayment period and increase your total interest costs over time.
Forgiveness programs are designed to forgive some or all of your remaining balance after making a certain number of payments; however, these programs typically have strict eligibility requirements that must be met before you can qualify for them.
Deferments allow you temporarily postpone making payments on your loan; however, interest will continue accruing during this time so it's important to weigh all these factors carefully when deciding which option is best for you and your family's financial situation.
Options for Private Parent Student Loans
Private parent student loans can be a great way to help your kids pay for college, but they can also be a source of stress and financial hardship if payments become difficult to make. Private student loans differ from federal loans in that they are not backed by the government and come with fewer repayment options than federal loans, making it more challenging to manage your debt.
If you find yourself struggling to make payments on your private parent student loan, there are several options available. The first step is to contact your lender and explain your situation. Many lenders offer different types of repayment plans such as graduated repayment plans or extended loan terms that can help reduce monthly payments.
Many private student loan lenders also offer discharge opportunities for borrowers who become permanently disabled, or in the case of death. If you are facing this situation, or you are the family member of a borrower who passed away, you will need to discuss the options available with the lender.
You may also consider consolidating your loans or refinancing them with another lender at a lower rate. This could help reduce the total amount owed or lower monthly payments. It’s important to note that refinancing a Parent PLUS loan may result in losing certain benefits associated with federal loans such as deferment and forbearance options, so it’s important to weigh all of the pros and cons before making a decision.
Best Student Loan Refinance Lenders
College Ave Student Loans
- Variable rate range: 5.99% – 11.99% APR1
- Fixed rate range: 5.99% – 11.99% APR1
- No application or prepayment fees
- Apply in 3 minutes or less for instant credit decision
College Ave Student Loans products are made available through Firstrust Bank, member FDIC, First Citizens Community Bank, member FDIC, or M.Y. Safra Bank, FSB, member FDIC.. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
1The 0.25% auto-pay interest rate reduction applies as long as the borrower or cosigner, if applicable, enrolls in auto-pay and authorizes our loan servicer to automatically deduct your monthly payments from a valid bank account via Automated Clearing House (“ACH”). The rate reduction applies for as long as the monthly payment amount is successfully deducted from the designated bank account and is suspended during periods of forbearance and certain deferments. Variable rates may increase after consummation.
2This informational repayment example uses typical loan terms for a refi borrower who selects the Full Principal & Interest Repayment Option with a 10-year repayment term, has a $40,000 loan and a 5.5% Annual Percentage Rate (“APR”): 120 monthly payments of $434.11 while in the repayment period, for a total amount of payments of $52,092.61. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.
3$5,000 is the minimum requirement to refinance. The maximum loan amount is $250,000 for those with medical, dental, pharmacy or veterinary doctorate degrees, and $150,000 for all other undergraduate or graduate degrees.
Information advertised valid as of 03/01/2023. Variable interest rates may increase after consummation. Approved interest rate will depend on the creditworthiness of the applicant(s), lowest advertised rates only available to the most creditworthy applicants and require selection of full principal and interest payments with the shortest available loan term.
ELFI Student Loan Refinance
- Our customers have reported that they are saving an average of $278 every month or will see an average of $20,774 in total savings after refinancing their student loans with Education Loan Finance.1
- Variable and fixed rates starting from 5.23% APR and 5.28% APR2
- Prequalify in as little as two minutes
- Award winning customer service from your dedicated Student Loan Advisor who is matched to you from the moment you sign up
1Average savings calculations are based on information provided by SouthEast Bank/ Education Loan Finance customers who refinanced their student loans between 01/03/23 and 03/01/23. While these amounts represent reported average amounts saved, actual amounts saved will vary depending upon a number of factors.
2Rates accurate as of 09/26/23. The interest rate and monthly payment for variable rate loans may increase after closing. Your actual interest rate may be different from the rates shown above and will be based on the term of your loan, your financial history, and other factors, including your cosigner’s (if any) financial history. For example, a 10 year loan with a fixed rate of 6% would have 120 payments of $11.00 per $1,000 borrowed. To qualify for refinancing or student loan consolidation through Education Loan Finance, you must have at least $10,000 in qualified student loan debt and must have earned a bachelor’s degree or higher from an approved post-secondary Education Loan Finance institution. Education Loan Finance Parent Loans are limited to a maximum of the 10-year term.
SoFi Student Loans
- Rates as low as 5.09% variable and 4.49% fixed1
- No fees or prepayment penalties
- Unemployment protection
1Fixed rates range from 4.49% APR to 8.99% APR with a 0.25% autopay discount. Variable rates from 5.09% APR to 8.99% APR with a 0.25% autopay discount. Unless required to be lower to comply with applicable law, Variable Interest rates on 5-, 7-, and 10-year terms are capped at 8.95% APR; 15- and 20-year terms are capped at 9.95% APR. Your actual rate will be within the range of rates listed above and will depend on the term you select, evaluation of your creditworthiness, income, presence of a co-signer and a variety of other factors. Lowest rates reserved for the most creditworthy borrowers. For the SoFi variable-rate product, the variable interest rate for a given month is derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR index increases. The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. This benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. The benefit lowers your interest rate but does not change the amount of your monthly payment. This benefit is suspended during periods of deferment and forbearance. Autopay is not required to receive a loan from SoFi.
Splash Financial Refinance Loan
- Rates as low as 4.74%1 Variable APR and 4.96%1 Fixed APR
- No pre-payment penalties, origination, or application fees
- See rates in 3 minutes without affecting your credit score2
1The rates displayed may include a 0.25% autopay discount.
2To check the rates and terms you qualify for, Splash Financial conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, the lender will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
Earnest Student Loan Refinancing
- Variable rates starting at 5.49% APR (including 0.25% Auto Pay discount)*
- Fixed rates starting at 4.96% APR (including 0.25% Auto Pay discount)*
- Choose your own monthly payment
- No fees of any kind and exceptional customer service for the life of your loan
- Check your rate in under 2 minutes
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Actual rate and available repayment terms will vary based on your income. Fixed rates range from 5.21% APR to 10.04% APR (excludes 0.25% Auto Pay discount). Variable rates range from 5.74% APR to 9.99% APR (excludes 0.25% Auto Pay discount). Earnest variable interest rate student loan refinance loans are based on a publicly available index, the 30-day Average Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. The variable rate is based on the rate published on the 25th day, or the next business day, of the preceding calendar month, rounded to the nearest hundredth of a percent. The rate will not increase more than once per month. The maximum rate for your loan is 8.95% if your loan term is 10 years or less. For loan terms of more than 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95%. Please note, we are not able to offer variable rate loans in AK, IL, MN, NH, OH, TN, and TX. Our lowest rates are only available for our most credit qualified borrowers and contain our .25% auto pay discount from a checking or savings account.
*Auto Pay Discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance. Not all borrowers will qualify for our lowest rates, and your rate will be based on creditworthiness at time of application.
The information provided on this page is updated as of 08/10/2023. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice.
Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 303 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, e-mail us at [email protected], or call 888-601-2801 for more information on our student loan refinance product.
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