collageStudent loan forgiveness, also known as student loan cancellation, is a form of public service loan forgiveness for parents. If your employer qualifies for Federal loan forgiveness, you must make 120 monthly payments on those loans through an income-driven repayment plan. Parent student loans are eligible for income-driven repayment plans and if you qualify, may be eligible for loan forgiveness. The following is general information about parent student loans and eligibility for forgiveness. For more detailed information see our article What Loans Are Eligible For Student Loan Forgiveness? Borrowers with parent loans have more options for student loan forgiveness than borrowers with Direct or FFELP loans. Parent loans are eligible for some Public Service Loan Forgiveness programs, which can forgive the remaining balance after 120 qualifying payments. Parent borrowers can also get their loans partially or fully discharged due to a disability of themselves or their children if they’d like.
Keep reading to find the answer to; are parent plus loans forgiven after 10 years, are parent plus loans forgiven if the parent dies, can a parent plus loan be forgiven due to disability and more. Also, available on our website are the answers to; will parent plus loans be included in student loan forgiveness, parent plus loan maximum amount, parent loan forgiveness for senior citizens, parent plus loan repayment, parent plus loan forgiveness 2022, etc.
Parent PLUS Loans
If you’re a parent who took out Parent PLUS loans to pay for your child’s education, you won’t be eligible for forgiveness. However, there are some good options available to you.
We recommend checking out refinancing options first. Refinancing is the process of taking out a new loan and using it to pay off an existing one. If you get approved for a lower interest rate on your new loan, you could save thousands of dollars over the life of your loan.
You can also explore consolidation or income-driven repayment plans as other ways to lower your monthly payment and make repaying your debt more manageable.
Student Loans
Student loans are loans that students take out in their own name. Typically, parents do not take out student loans and thus, parent student loans would not be eligible for forgiveness.
However, some parents may have taken out a Parent PLUS loan on behalf of their child and to pay for the cost of education. The student is still responsible for repaying the loan and all payments must be made by the student.
Graduate PLUS Loans
Grad PLUS Loans are not eligible for loan forgiveness, deferment or forbearance. If you have Grad PLUS loans, the only way to lower your monthly payment amount is to consolidate them with other federal loans. Before consolidating your Grad PLUS loans you will want to make sure that you do not qualify for any of the forgiveness programs; as consolidating will eliminate your eligibility.
Perkins Loans
While it’s true that Perkins loans are government-funded student loans, they are not eligible for PSLF. You must have a Direct Loan to be eligible for PSLF. Perkins Loans were typically reserved for students who demonstrated exceptional financial need. The Perkins program is no longer issuing new loans, but there are still some borrowers with existing Perkins loan debt.
Perkins loans have a fixed interest rate of 5%. For any questions about the status of your existing Perkins loan, contact your school’s financial aid office or Federal Student Aid Customer Service at 1-800-433-3243.
Parent PLUS loans will likely not be eligible for forgiveness.
While there are a number of loan forgiveness programs available for Federal student loans, Parent PLUS loans will likely not be eligible for forgiveness. Parent PLUS Loans are not eligible for income-based repayment plans and therefore cannot qualify for the Public Service Loan Forgiveness Program. Additionally, the federal government does not currently offer any loan forgiveness program specifically to Parents taking out Parent PLUS Loans to fund their child’s education.
are parent plus loans forgiven after 10 years
Parent PLUS Loan Forgiveness: Everything You Need to Know
April 13, 2022
Student loan forgiveness programs aren’t just for students. Depending on lender qualification requirements and borrower history, parent loan forgiveness is also possible. Many parents struggling to repay student loan debt can qualify for loan forgiveness.
A federal parent PLUS loan may be eligible for forgiveness through an income-contingent repayment plan or the Public Service Loan Forgiveness (PSLF) program. There are also options for parents that take out loans from private lenders.
A parent PLUS loan, or Direct PLUS loan, is a form of federal student aid. Once a student reaches federal student loan limits, parent borrowers will often take out a PLUS loan. A parent PLUS loan is an unsubsidized federal direct loan. Because they are not subsidized loans, interest accrues while the student is in college.
However, some parents borrow more than they can afford to repay. In 2013, the federal government removed annual and lifetime borrowing limits from parent PLUS loans, allowing parents to borrow the full amount of a college education. Since the government removed the limits, more parents defaulted on their PLUS loans.
So, does Parent PLUS loan forgiveness exist? Yes, but only in some circumstances.
Are Parent PLUS Loans Eligible for Forgiveness? Options for Parent Loan Forgiveness
If you’re a parent borrower with a Direct PLUS loan or a private loan and you’re wondering: can parent PLUS loans be forgiven, consider these options:
- Income-Contingent Repayment
- Public Service Loan Forgiveness
- Temporary Expanded Public Service Loan Forgiveness
- Federal Agencies
- Military Forgiveness Programs
- State Student Loan Forgiveness
- Employer-paid Student Loan Assistance
- Refinancing
Parent PLUS Loan Forgiveness Student through Income-Contingent Repayment
Parent PLUS loans are not directly eligible for income-driven repayment plans.
However, a Federal Direct Consolidation loan that includes Parent PLUS loans may be eligible for Income-Contingent Repayment (ICR). The borrower must have entered repayment on or after July 1, 2006, per the regulations at 34 CFR 685.208(a)(2)(iv)(D).
A parent PLUS loan in the Direct Loan program or the Federal Family Education Loan Program (FFELP) is eligible if it is included in a Federal Direct Consolidation Loan.
Income-contingent repayment bases the monthly payment on 20% of the borrower’s discretionary income, which is defined as the amount by which the borrower’s adjusted gross income (AGI) exceeds 100% of the poverty line.
The remaining loan balance is forgiven after a 25-year repayment term (300 payments). Generally, the IRS treats cancelled debt as taxable income for student loan borrowers. But, the American Rescue Plan Act of 2021 made all student loan forgiveness tax-free through 2025.
An income-contingent repayment plan is the only income-driven repayment program available to a parent PLUS borrower. To qualify for this parent student loan forgiveness, a borrower must consolidate their PLUS loan into a Direct Consolidation Loan, and repay the consolidation loan under the income-contingent repayment plan.
Public Service Loan Forgiveness for Parent PLUS Loans
Parent borrowers may be eligible for Public Service Loan Forgiveness (PSLF) after making 120 qualifying payments (ten years).
Parent PLUS loans are eligible if they are in the Direct Loan program or included in a Federal Direct Consolidation Loan. The borrower must work full-time in a qualifying public service job.
Eligible repayment plans include standard repayment and income-driven repayment plans. If a borrower repays their loans under the standard repayment plan for ten years, there will be nothing left to forgive. So, the borrower will need to repay their loans in an income-driven repayment plan to earn some forgiveness under public service loan forgiveness.
If a borrower consolidates their Parent PLUS loans into a Federal Direct Consolidation Loan, the consolidation loan will be eligible for income-contingent repayment, as noted above.
Another option is the Temporary Expanded Public Service Loan Forgiveness (TEPSLF) program, enacted by the Consolidated Appropriations Act, 2018 (P.L. 115-141). A Federal Direct Consolidation Loan that repaid a Federal PLUS Loan is eligible for TEPSLF if some or all of the 120 qualifying payments were made under a graduated repayment or extended repayment plan, provided that the last year of payments were at least as much as the borrower would have paid under an income-driven repayment plan.
Other Options for Loan Forgiveness of Parent Loans
Federal agencies
Federal agencies may repay federal education loans, including Parent PLUS loans, as an employee recruitment or retention tool, but only if the employee is the parent PLUS loan borrower. Thus, a Parent PLUS loan may be forgiven if the parent works for the federal agency, but not if the student works for the federal agency.
Military forgiveness programs
Parent PLUS loans may be eligible for repayment under the various military loan forgiveness programs, depending on the service. The loan forgiveness may be limited to Parent PLUS loans borrowed on behalf of a student who is the Service member. Private parent loans are not eligible.
State student loan forgiveness
Several states offer student loan repayment assistance for borrowers who move to the state or specific cities or counties within the state. Parent loans, including both Parent PLUS and private parent loans, may be eligible.
Employer-paid student loan assistance
Parent loans are eligible for many employer-paid student loan repayment assistance programs, commonly known as LRAPs. This includes both Parent PLUS loans and private parent loans.
Loan Discharge Programs
Parent PLUS loans are also eligible for certain discharges, including:
- Death of the parent or death of student on whose behalf the Parent PLUS loan was borrowed
- The parent (but not the student) becomes totally and permanently disabled
- Bankruptcy discharge (rare)
- Closed school discharge
- False certification discharge
- Identity theft discharge
- Unpaid refund discharge
- Defense to repayment
Private parent loans may also be eligible for a death or disability discharge, depending on the lender.
Refinancing a Parent Loan
If you don’t qualify for loan forgiveness, you may be able to lower your payments by refinancing. However, a federal loan can only be refinanced into a private loan. That means if you have a federal loan you will lose federal loan protections such as:
- Forbearance and deferment
- Choice of repayment option
- Potential student loan forgiveness
You may also have the option to refinance your parent loan in your child’s name. This might make sense if your child is now graduated and working, and you are nearing retirement. Keep in mind, however, that not every loan servicer will offer this type of student loan refinancing for parents
Conclusion
Parent PLUS loan forgiveness is possible under a few different circumstances. On top of those, student loan discharges and refinancing are other options available to parents that struggle to repay a Direct PLUS loan.
are parent plus loans forgiven if the parent dies
If your loan servicer receives acceptable documentation of your death, your federal student loans will be discharged.
Learn more about discharge due to death and what documentation is needed for discharge.
Federal student loans will be discharged due to the death of the borrower or of the student on whose behalf a PLUS loan was taken out.
What happens to my loans if I die?
If you die, then your federal student loans will be discharged after the required proof of death is submitted.
What happens to my parent’s PLUS loan if my parent dies or if I die?
Your parent’s PLUS loan will be discharged if your parent dies or if you (the student on whose behalf your parent obtained the loan) die.
What proof of death is needed to discharge a loan?
The loan will be discharged if a family member or other representative provides the loan servicer acceptable documentation of the borrower’s or parent’s death. Acceptable documentation includes an original death certificate, a certified copy of the death certificate, or an accurate and complete photocopy of one of those documents. For more information about documentation requirements, contact your loan servicer.
can a parent plus loan be forgiven due to disability
I’m a parent who took out a Direct PLUS Loan to help pay for my child’s education. Can my loan ever be discharged?
MANAGING YOUR ACCOUNTREPAYING LOANSYour Parent PLUS Loan may be discharged if you die, if you (not the student for whom you borrowed) become totally and permanently disabled, or, in rare cases, if you file for bankruptcy. Your Parent PLUS Loan may also be discharged if the child for whom you borrowed dies.
In addition, all or a portion of a Parent PLUS Loan may be discharged in any of these circumstances:
- The child for whom you borrowed could not complete his or her program because the school closed.
- Your eligibility to receive the loan was falsely certified by the school.
- Your eligibility to receive the loan was falsely certified through identity theft.
- The child for whom you borrowed withdrew from school, but the school didn’t pay a refund of your loan money that it was required to pay under applicable laws and regulations.
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