Parent PLUS Loans are federal loans that parents can take out to help pay for their children's college education. These loans have higher interest rates than other federal student loans, and they are not eligible for the same repayment plans.
However, there are some options for forgiveness of Parent PLUS Loans. These include:
In this article, we will discuss the different options for forgiveness of Parent PLUS Loans and how to apply for each program.
forgive parent plus loans
Options for federal student loan forgiveness programs.
- Public Service Loan Forgiveness
- Teacher Loan Forgiveness
- Perkins Loan Cancellation
- Income-Driven Repayment Forgiveness
- Borrower Defense to Repayment
- Total and Permanent Disability Discharge
- Death Discharge
- Closed School Discharge
- Bankruptcy Discharge
Each program has different requirements and eligibility criteria.
Public Service Loan Forgiveness
The Public Service Loan Forgiveness (PSLF) program forgives the remaining balance on your Parent PLUS Loans after you have made 120 qualifying payments while working full-time for a qualifying public service employer.
- Qualifying employers:
Qualifying employers include government agencies, public schools and colleges, and certain non-profit organizations.
- Qualifying payments:
Qualifying payments are payments made under an income-driven repayment plan while you are working full-time for a qualifying public service employer. Payments made under other repayment plans, such as the Standard Repayment Plan, do not qualify.
- 120 qualifying payments:
You must make 120 qualifying payments on your Parent PLUS Loans to be eligible for forgiveness. This means working full-time for a qualifying public service employer for at least 10 years.
- Remaining balance forgiven:
After you have made 120 qualifying payments, the remaining balance on your Parent PLUS Loans will be forgiven. This forgiveness is tax-free.
To apply for PSLF, you must submit an application to the U.S. Department of Education. The application is available online.
Teacher Loan Forgiveness
The Teacher Loan Forgiveness program forgives the remaining balance on your Parent PLUS Loans after you have taught full-time for five complete and consecutive academic years in a low-income school or educational service agency.
- Qualifying teachers:
Qualifying teachers include certified teachers, special education teachers, and certain other instructional personnel who work in a public elementary or secondary school or educational service agency that serves low-income students.
- Qualifying schools:
Qualifying schools are public elementary or secondary schools or educational service agencies that serve a high percentage of students from low-income families. The school must be located in a Title I school district or a school that serves a high percentage of students who are eligible for free or reduced-price lunch.
- Five complete and consecutive academic years:
You must teach full-time for five complete and consecutive academic years in a qualifying school or educational service agency to be eligible for forgiveness. This means teaching for at least 10 months per year for five consecutive years.
- Remaining balance forgiven:
After you have taught for five complete and consecutive academic years in a qualifying school or educational service agency, the remaining balance on your Parent PLUS Loans will be forgiven. This forgiveness is tax-free.
To apply for Teacher Loan Forgiveness, you must submit an application to the U.S. Department of Education. The application is available online.
Perkins Loan Cancellation
The Perkins Loan Cancellation program forgives the remaining balance on your Parent PLUS Loans if you work in certain public service jobs.
- Qualifying employers:
Qualifying employers include public elementary and secondary schools, public colleges and universities, public child care centers, and certain other public service agencies.
- Qualifying jobs:
Qualifying jobs include teaching, nursing, social work, law enforcement, and certain other public service professions.
- Cancellation amounts:
The amount of your Parent PLUS Loans that is forgiven depends on the type of job you have and the length of time you work in that job. You can receive up to 100% of your loans forgiven.
- Applying for forgiveness:
To apply for Perkins Loan Cancellation, you must submit an application to your loan servicer. The application is available online.
Note: The Perkins Loan Cancellation program is no longer available for new loans. However, if you have an existing Perkins Loan, you may still be eligible for forgiveness.
Income-Driven Repayment Forgiveness
The Income-Driven Repayment (IDR) Forgiveness program forgives the remaining balance on your Parent PLUS Loans after you have made 20 or 25 years of qualifying payments under an IDR plan.
- IDR plans:
IDR plans are repayment plans that cap your monthly loan payments at a percentage of your discretionary income. This can make your loans more affordable and help you qualify for forgiveness sooner.
- Qualifying payments:
Qualifying payments are payments made under an IDR plan while you are working full-time. Payments made under other repayment plans, such as the Standard Repayment Plan, do not qualify.
- 20 or 25 years of payments:
You must make 20 years of qualifying payments if you have undergraduate loans only. If you have both undergraduate and graduate loans, you must make 25 years of qualifying payments.
- Remaining balance forgiven:
After you have made 20 or 25 years of qualifying payments, the remaining balance on your Parent PLUS Loans will be forgiven. This forgiveness is tax-free.
To apply for IDR Forgiveness, you must submit an application to your loan servicer. The application is available online.
Borrower Defense to Repayment
The Borrower Defense to Repayment program allows you to have your Parent PLUS Loans forgiven if you were defrauded by your college or university.
- What is fraud?
Fraud is a misrepresentation or omission of a material fact with the intent to deceive someone. In the context of student loans, fraud can include things like misrepresenting the cost of attendance, the job placement rate of graduates, or the accreditation of the school.
- Who is eligible?
You may be eligible for borrower defense to repayment if you were defrauded by your college or university and you meet certain other criteria, such as being unable to complete your degree or being unable to find a job in your field of study.
- How to apply:
To apply for borrower defense to repayment, you must submit an application to the U.S. Department of Education. The application is available online.
- What happens if my application is approved?
If your application is approved, your Parent PLUS Loans will be forgiven. You will also be refunded any money that you have already paid on your loans.
Note: The Borrower Defense to Repayment program is currently undergoing changes. The U.S. Department of Education is expected to release new regulations for the program in the near future.
Total and Permanent Disability Discharge
The Total and Permanent Disability (TPD) Discharge program forgives the remaining balance on your Parent PLUS Loans if you are unable to work due to a total and permanent disability.
- What is a total and permanent disability?
A total and permanent disability is a disability that prevents you from working in any gainful occupation for which you are qualified. The disability must be expected to continue for at least five years or result in death.
- Who is eligible?
You may be eligible for TPD discharge if you have a total and permanent disability and you meet certain other criteria, such as being unable to earn more than a certain amount of money.
- How to apply:
To apply for TPD discharge, you must submit an application to the U.S. Department of Education. The application is available online.
- What happens if my application is approved?
If your application is approved, your Parent PLUS Loans will be forgiven. You will also be refunded any money that you have already paid on your loans.
Note: You may also be eligible for TPD discharge if your child, who is the student borrower, is unable to work due to a total and permanent disability.
Death Discharge
The Death Discharge program forgives the remaining balance on your Parent PLUS Loans if your child, who is the student borrower, dies.
Who is eligible?
- You are eligible for death discharge if you are the parent of a student borrower who died.
- You are also eligible if you are the spouse of a student borrower who died and you were jointly responsible for the Parent PLUS Loans.
How to apply:
- To apply for death discharge, you must submit an application to your loan servicer. The application is available online.
- You will need to provide documentation of your child's death, such as a death certificate.
What happens if my application is approved?
- If your application is approved, your Parent PLUS Loans will be forgiven.
- You will also be refunded any money that you have already paid on your loans.
Note: Death discharge is also available for other federal student loans, such as Direct Subsidized Loans and Direct Unsubsidized Loans.
Closed School Discharge
The Closed School Discharge program forgives the remaining balance on your Parent PLUS Loans if the school that your child attended closes.
- What is a closed school?
A closed school is a school that has ceased to operate and is no longer offering educational services to students.
- Who is eligible?
You may be eligible for closed school discharge if your child attended a school that closed while your child was enrolled or within 120 days after your child withdrew from the school.
- How to apply:
To apply for closed school discharge, you must submit an application to your loan servicer. The application is available online.
- What happens if my application is approved?
If your application is approved, your Parent PLUS Loans will be forgiven. You will also be refunded any money that you have already paid on your loans.
Note: Closed school discharge is also available for other federal student loans, such as Direct Subsidized Loans and Direct Unsubsidized Loans.
Bankruptcy Discharge
The Bankruptcy Discharge program forgives the remaining balance on your Parent PLUS Loans if you file for bankruptcy and meet certain other criteria.
Who is eligible?
- You may be eligible for bankruptcy discharge if you have filed for bankruptcy under Chapter 7 or Chapter 13.
- You must also meet certain other criteria, such as being unable to repay your loans due to your financial hardship.
How to apply:
- To apply for bankruptcy discharge, you must submit an application to your loan servicer. The application is available online.
- You will need to provide documentation of your bankruptcy filing, such as a copy of your bankruptcy petition and discharge order.
What happens if my application is approved?
- If your application is approved, your Parent PLUS Loans will be forgiven.
- You will also be refunded any money that you have already paid on your loans.
Note: Bankruptcy discharge is not available for all federal student loans. For example, you cannot discharge Perkins Loans through bankruptcy.
FAQ
Here are some frequently asked questions about Parent PLUS Loans and loan forgiveness:
Question 1: What is a Parent PLUS Loan?
Answer: A Parent PLUS Loan is a federal loan that parents can take out to help pay for their children's college education.
Question 2: What are the eligibility requirements for a Parent PLUS Loan?
Answer: To be eligible for a Parent PLUS Loan, you must be the parent of a dependent undergraduate student who is enrolled at least half-time in a degree program at an eligible school. You must also pass a credit check.
Question 3: What is the interest rate on a Parent PLUS Loan?
Answer: The interest rate on a Parent PLUS Loan is fixed at 7.54% for loans first disbursed on or after July 1, 2022.
Question 4: What are the repayment options for a Parent PLUS Loan?
Answer: You have several repayment options for a Parent PLUS Loan, including the Standard Repayment Plan, the Graduated Repayment Plan, and the Extended Repayment Plan. You can also apply for income-driven repayment, which caps your monthly payments at a percentage of your discretionary income.
Question 5: Can I get Parent PLUS Loans forgiven?
Answer: Yes, there are several ways to get Parent PLUS Loans forgiven, including Public Service Loan Forgiveness, Teacher Loan Forgiveness, Perkins Loan Cancellation, and Total and Permanent Disability Discharge.
Question 6: How do I apply for Parent PLUS Loan forgiveness?
Answer: The application process for Parent PLUS Loan forgiveness varies depending on the program you are applying for. In general, you will need to submit an application to your loan servicer. The application is available online.
Question 7: What are the tax implications of Parent PLUS Loan forgiveness?
Answer: Parent PLUS Loan forgiveness is generally not taxable. However, if you have forgiven Parent PLUS Loans that were used to pay for qualified education expenses, you may be required to pay taxes on the amount of the forgiveness that is more than the amount of the qualified education expenses.
Closing Paragraph:
If you have Parent PLUS Loans and are struggling to repay them, there are several options available to help you. You may be eligible for loan forgiveness, or you may be able to lower your monthly payments through income-driven repayment. Contact your loan servicer to learn more about your options.
Here are some additional tips for managing Parent PLUS Loans:
Tips
Here are some tips for managing Parent PLUS Loans:
Tip 1: Shop around for the best interest rate.
If you have good credit, you may be able to find a private student loan with a lower interest rate than the Parent PLUS Loan. Be sure to compare interest rates and fees before you decide which loan to take out.
Tip 2: Make extra payments when you can.
Even if it's just a small amount, making extra payments on your Parent PLUS Loans can help you pay down your debt faster and save money on interest.
Tip 3: Consider refinancing your loans.
If you have good credit, you may be able to refinance your Parent PLUS Loans at a lower interest rate. This can help you save money on your monthly payments and pay down your debt faster.
Tip 4: Apply for loan forgiveness.
If you qualify for loan forgiveness, you can have your Parent PLUS Loans forgiven after a certain number of years of service or under certain other circumstances. Be sure to research the different loan forgiveness programs available to see if you qualify.
Closing Paragraph:
Managing Parent PLUS Loans can be challenging, but there are several things you can do to make it easier. By following these tips, you can save money, pay down your debt faster, and achieve your financial goals.
Conclusion:
Conclusion
Summary of Main Points:
- Parent PLUS Loans are federal loans that parents can take out to help pay for their children's college education.
- Parent PLUS Loans have higher interest rates than other federal student loans and are not eligible for the same repayment plans.
- There are several options for forgiveness of Parent PLUS Loans, including Public Service Loan Forgiveness, Teacher Loan Forgiveness, Perkins Loan Cancellation, and Total and Permanent Disability Discharge.
- Parents can manage their Parent PLUS Loans by shopping around for the best interest rate, making extra payments when possible, considering refinancing their loans, and applying for loan forgiveness.
Closing Message:
If you are a parent considering taking out a Parent PLUS Loan, it is important to understand the terms and conditions of the loan before you sign on the dotted line. You should also be aware of the different options available for forgiveness of Parent PLUS Loans. By planning ahead, you can help ensure that you are able to repay your Parent PLUS Loans without undue financial hardship.