collageStudent loan debt is a growing concern for many college graduates, with nearly half of them struggling to repay their loans. For some, the burden becomes so overwhelming that they turn to their parents for help. While it may be a difficult decision to ask for financial assistance from parents, it is a reality that many borrowers face.
The issue of whether parents are responsible for student loans is a common concern for many students and their families. In many cases, parents do sign for their children to take out loans, leading to the question of who is ultimately responsible for repayment. However, there are situations where parents have not signed any loan documents, leaving students unsure of their financial obligations.
When it comes to admission requirements for student loans, most lenders require students to be at least 18 years old or have a co-signer who is willing to take on financial responsibility. In some cases, parents may be required to co-sign for their child’s loan if the student does not meet certain credit or income requirements. It is important for students to understand the terms and conditions of their loans before agreeing to any financial agreements.
The admission process for universities may vary depending on the institution and the type of program. Students should research the specific admission requirements for the university they are interested in attending, including any financial aid options available. It is important for students to fully understand their financial responsibilities before enrolling in any program that requires student loans.
are parents responsible for their child student loans
Find out about – who is responsible for a student loan, can my child get a student loan on their own, parent plus loan in this article.
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Private student loans
If you are an adult over the age of 18 and have a good credit score, you can potentially qualify for private student loans. Private student loans come from private lenders like banks, credit unions, or online providers. Because these types of student loans are not federally backed, they use credit-based approval standards to determine who qualifies and what interest rates borrowers will receive. If you have already graduated and have a job or steady income, your lender may require that you apply with a co-signer to increase your chances of approval.
Federal student loans
Federal student loans don’t require a credit check, so there’s no need for a parent to co-sign. Plus, parents aren’t responsible for paying back their child’s federal loans.
Instead, you’ll need to fill out the Free Application for Federal Student Aid (FAFSA) to see what federal aid is available to you and your child. The FAFSA will ask about both your financial information and your child’s. Your income and assets are taken into account when determining how much your child can borrow in federal student loans.
The amount of money students can borrow in federal student loans depends on the academic year they’re in and if they’re dependent or independent students:
- It takes 10 years to pay off federal direct loans, although there are other repayment options that take longer.
are parents responsible for student loans
No, parents are not responsible for student loans.
Parents are not responsible for paying their children’s student loans. One exception would be if the parents had cosigned a private loan for the child and the child stopped making payments. In those cases, the parents would assume responsibility for repayment of the loan since they had signed a contract guaranteeing payment.
Education loans are not typically discharged in bankruptcy, so even if parents did want to pay off their children’s student loans, it probably wouldn’t help as much as they hoped it would initially. The debts would still exist and could continue to be collected on by lenders. Some creditors have been known to garnish wages of family members if they have no other way to get payment from a debtor. However, this is illegal when it comes to student loans because federal laws prohibit garnishing wages of anyone else connected to your child based on your child’s debt.
who is responsible for student loan debt
Rights & Responsibilities
For many students, borrowing a student loan is their first experience in lending. It is important to understand that when you take out student loans for school, you are signing a contract that you agree to repay the loans. The Master Promissory Note (MPN) is a legally binding document.
Before you agree to take out student loans, you should understand your rights and responsibility as a student loan borrower.
Borrower Rights
Federal student loan borrowers have a number of options to successfully manage student loan debt. These options include: the right to temporarily stop payments with a deferment or forbearance, the right to reduced payments by switching repayment plans, depending on your financial circumstances and other conditions, and the right to loan cancellation, discharge or forgiveness in certain situations.
Borrower Responsibilities
As a federal student loan borrower, you are responsible for the repayment of your loan. You remain responsible for repaying your loan regardless of whether you graduate from college or feel dissatisfied with the education you received.
You are responsible for knowing when your loan repayment begins, and your required payments. It is important to prepare for repayment as you get ready to graduate or withdraw from school.
You are responsible for notifying your loan servicer of any change to your address. If you move, and do not receive your student loan bills, you are still responsible for making your required payments.
You are also responsible for notifying your loan servicer and school if your name or contact information changes, if you transfer or withdraw from school, after a change in employment, or any change that could impact your loan.
You are responsible for notifying your school’s financial aid office if you stop attending your classes, withdraw, or do not re-enroll as planned. You are also responsible for notifying your financial aid office if your expected graduation date changes.
can my child get a student loan on their own
How to Take Out Student Loans Without Your Parents
You can still take out both federal and private student loans even without your parent’s financial information.
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Getting a student loan without access to your parents’ financial information or credit history may be difficult, but it’s not impossible.
If you’re an independent student then you can borrow federal direct loans. If you have good credit, you can also choose from multiple private lenders. However, if you’re still technically dependent on your parents or you don’t have credit history, your choices are more limited.
No matter your situation, start by filling out the Free Application for Federal Student Aid, known as the FAFSA, and applying for federal student loans. They’re preferred over private loans due to their low interest rates, varied repayment options and loan forgiveness opportunities.
Here’s how you can get a student loan without your parents.
Take out a federal student loan as an independent student
You don’t need any parent information to apply for federal student loans if you’re an independent student. You’ll also have higher federal loan limits. You can borrow up to $57,000 in total federal student loans as an independent student, rather than $31,000 as a dependent student.
The answers you provide on the FAFSA determine your dependency status. If you answer “Yes” to at least one of the dependency questions on the application, you are considered independent. Use this checklist to prepare documents you’ll need to apply as an independent student.
However, you won’t be considered independent just because your parents won’t help with the process. If you answer “No” to all of the dependency questions on the FAFSA, then you’re considered a dependent student, whether your parents will provide their information or not.
Pursue unsubsidized loans without your parents’ information
If you’re considered dependent and don’t have one or both of your parents’ information, you can still apply for federal student loans. You have two possible routes:
- Get a dependency override. If you provide documentation to the U.S. Department of Education to prove you should be considered an independent student, you could get a dependency override. Approvals are made on a case-by-case basis and will apply only to students with unusual circumstances, such as an abusive family environment or parental abandonment.
- Apply for aid without your parents. If you don’t qualify for a dependency override but your parents are unwilling to share their information, choose the following option on the FAFSA: “I am unable to provide information about my parent(s).” You then must select the option that indicates you don’t have a special circumstance but can’t provide parent information.
Without your parents’ information, you won’t get an Expected Family Contribution, which usually determines your aid. You will be able to take out an unsubsidized federal loan only, if any loan at all. Your college’s financial aid office will decide whether to lend to you. Contact your school to discuss taking out an unsubsidized loan.
Find another relative or friend to co-sign a private loan
If you need a private student loan to fill a college payment gap, but your parents are unable to co-sign, consider asking a relative or close friend to do so.
Choose a co-signer who can qualify. That means they need a credit score in the upper 600s or higher and a steady income. Make sure your co-signer understands he or she will be required to pay your student loan debt if you can’t.
Private student loans, even with a co-signer, are more expensive than federal student loans because they carry higher interest rates.
Find private student loans that don’t require credit or a co-signer
If you have no co-signer and no credit, but still need a private student loan, look into student loans without a co-signer. Typically, these lenders will consider your future income potential instead of your credit history when deciding whether to approve your application.
Private loans for independent students will carry higher interest rates than both federal loans and private loans with a co-signer. Compare offers from multiple lenders to get the best rate.
parent plus loan
Direct PLUS Loans are federal loans that parents of dependent undergraduate students can use to help pay for college or career school.
PLUS loans can help pay for education expenses not covered by other financial aid.
The U.S. Department of Education makes Direct PLUS Loans to eligible parents through schools participating in the Direct Loan Program. (We also offer PLUS loans for graduate or professional students.)
A Direct PLUS Loan is commonly referred to as a parent PLUS loan when made to a parent borrower.
Important: Most schools require you to submit the PLUS loan application online, although some schools have different application processes.
Note: Before you apply for a PLUS loan, make sure your child has already filled out the Free Application for Federal Student Aid (FAFSA®) form.
Am I eligible for a parent PLUS loan?
To receive a parent PLUS loan, you must
- be the biological or adoptive parent (or in some cases, the stepparent) of a dependent undergraduate student enrolled at least half-time at an eligible school;
- not have an adverse credit history (unless you meet certain additional requirements); and
- meet the general eligibility requirements for federal student aid
Note: Grandparents (unless they have legally adopted the dependent student) and legal guardians are not eligible to receive parent PLUS loans, even if they have had primary responsibility for raising the student.
Try This Resource
Federal Student Loans: Direct PLUS Loan Basics for Parents—Provides parents with information on Direct PLUS Loans for parents. Includes an overview of eligibility, the application process, and repayment.
What is the current interest rate?
For Direct PLUS Loans first disbursed on or after July 1, 2021, and before July 1, 2022, the interest rate is 6.28%. This is a fixed interest rate for the life of the loan.
How much can I borrow?
The maximum PLUS loan amount you can borrow is the cost of attendance at the school your child will attend minus any other financial assistance your child receives. The cost of attendance is determined by the school.
Do I have to make payments on my loan while my child is still in school?
If you request a deferment, you will not need to make payments while your child is enrolled at least half-time and for an additional six months after your child graduates, leaves school, or drops below half-time enrollment. If the school your child is attending requires you to submit your request for a parent PLUS loan at StudentAid.gov, you’ll have the option of requesting a deferment as part of the loan request process. You can also contact your loan servicer to request a deferment.
If you do not request a deferment, you will be expected to begin making payments after the loan is fully disbursed (paid out).
During any period when you’re not required to make payments, interest will accrue on your loan. You may choose to pay the accrued interest or allow the interest to be capitalized (added to your loan principal balance) when you have to start making payments. Your loan servicer will notify you when your first payment is due.
Can I still receive a parent PLUS loan if I have an adverse credit history?
A credit check will be performed during the application process. If you have an adverse credit history, you may still receive a parent PLUS loan through one of these two options:
- Obtaining an endorser who does not have an adverse credit history. An endorser is someone who agrees to repay the parent PLUS loan if you do not repay it. The endorser cannot be the child on whose behalf you are borrowing.
- Documenting to the satisfaction of the U.S. Department of Education that there are extenuating circumstances relating to your adverse credit history.
With either option 1 or option 2, you also must complete credit counseling for parent PLUS loan borrowers.
Try This Resource
Direct PLUS Loans and Adverse Credit—: Answers common questions about how an adverse credit history affects Direct PLUS Loan eligibility.
If you are unable to obtain a parent PLUS loan, your child may be eligible for additional unsubsidized loans. Your child should contact the school’s financial aid office for more information.
How do I apply for a parent PLUS loan?
Go to the online Direct PLUS Loan Application for Parents.
Important: Most schools require you to apply for a Direct PLUS Loan online, but some schools have different application processes. This site has a list of schools that participate in the Direct Loan Program. When you select your child’s school from the list, the site will tell you if the school has a different application process. In that case, check with the school’s financial aid office to find out how to request a parent PLUS loan.
Note: Before applying for a parent PLUS loan, make sure your child has filled out the FAFSA form.
What additional steps must I take to receive my loan?
If you are eligible for a parent PLUS loan, you will be required to sign a Direct PLUS Loan Master Promissory Note (MPN), agreeing to the terms of the loan. Contact the financial aid office at the school your child is planning to attend for details regarding the process at that school.
If you’re taking out parent PLUS loans for more than one child, you’ll need to sign separate Direct PLUS Loan MPNs for the loans you receive for each child.
Other than interest, is there a charge for this loan?
Yes, there is a loan fee on all Direct PLUS Loans. The loan fee is a percentage of the loan amount and is proportionately deducted from each loan disbursement. The percentage varies depending on when the loan is first disbursed, as shown in the chart below.
Loan Fees for Direct PLUS Loans
| First Disbursement Date | Loan Fee |
| On or after Oct. 1, 2020, and before Oct. 1, 2021 | 4.228% |
| On or after Oct. 1, 2021, and before Oct. 1, 2022 | 4.228% |
Loans first disbursed before Oct. 1, 2020, have different loan fees.
How will I receive my loan?
The school will first apply parent PLUS loan funds to the student’s school account to pay for tuition, fees, room and board, and other school charges. If any loan funds remain, your child’s school will give them to you to help pay other education expenses for the student. With your authorization, the school can pay the remaining loan funds directly to the student. Get more information about receiving aid.
What happens after I receive my loan?
After you receive your parent PLUS loan, you will be contacted by your loan servicer (you will repay your loan to the loan servicer). Your loan servicer will provide regular updates on the status of your parent PLUS loan.
What types of loan repayment plans are available?
Parent PLUS borrowers are eligible for the following repayment plans:
- Standard Repayment Plan
- Graduated Repayment Plan
- Extended Repayment Plan
Note: Parent borrowers can become eligible for an additional repayment plan—the Income-Contingent Repayment Plan—by consolidating their parent PLUS loans into a Direct Consolidation Loan.
Use Loan Simulator to get an early estimate of what your monthly payment amount would be under the plans for which you’re eligible.
What if I have trouble repaying my loan?
If you are unable to make your scheduled loan payments, contact your loan servicer immediately. Your servicer can help you understand your options for keeping your loan in good standing. For example, you may wish to change your repayment plan to lower your monthly payment or request a deferment or forbearance that allows you to temporarily stop or lower the payments on your loan.Learn more about deferment and forbearance options.
As a parent PLUS loan borrower, can I transfer responsibility for repaying the loan to my child?
No, a Direct PLUS Loan made to a parent cannot be transferred to the child. You, the parent borrower, are legally responsible for repaying the loan.
Can I cancel the loan if I decide that I don’t need it or if I need less than the amount offered?
Yes. Before your loan money is disbursed, you may cancel all or part of your loan at any time by notifying your child’s school. After your loan is disbursed, you may cancel all or part of the loan within certain time frames. Your promissory note and additional information you’ll receive from the school will explain the procedures and time frames for canceling your loan.
Can my loan ever be forgiven (canceled) or discharged?
Under certain conditions, you may be eligible to have all or part of your loan forgiven (canceled) or discharged. Find out about loan forgiveness, cancellation, and discharge.
If you are seeking Public Service Loan Forgiveness, you will need to repay your loans under an income-driven repayment plan. The Income-Contingent Repayment Plan is the only income-driven repayment plan available to parent PLUS borrowers, and to repay your parent PLUS loans under the Income-Contingent Repayment Plan, you must first consolidate the loans into a Direct Consolidation Loan.
Where can I find information about the parent PLUS loans I’ve received?
Visit “My Aid” to view information about all of the federal student loans and other financial aid you have received and to get contact information for your loan servicer.
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