College costs being what they are, many parents take on federal Parent Plus loans in order to help finance their children’s’ educations. Unfortunately, Parent PLUS loans do not offer all the forgiveness programs of many other federal student loans. However, there are still a number of ways you can seek Parent Plus loan forgiveness or at least more lenient repayment options.
Parent PLUS Loan Forgiveness Based On Employment
There are certain jobs that offer student loan forgiveness for Parent PLUS Loans. The parent must be the one employed at the position and it is irrelevant what the childs position is.
Parent PLUS Loan Forgiveness for Public Sector & Non-Profit Employees
Parents who work for a qualifying employer may be eligible for the Public Service Loan Forgiveness (PSLF) Program after making 120 monthly payments under a qualifying repayment plan. Forgiveness is offered to entice people to work for a couple years in places or roles that serve the public good and where there is a great need. Since the parent is the borrower, the parent must work in one of these jobs rather than the student. You may qualify if you work for a government organization, a 501(c)(3) not-for-profit, certain not-for-profits that are not 501(c)(3) organizations or are a full-time volunteer for AmeriCorps or Peace Corps. Only Direct loans are eligible, but if you get a Direct Loan Consolidation, you can make your FFEL loan eligible.
For a Parent PLUS loan to qualify for PSLF, you must first consolidate your loans into the William D. Ford Direct Loan program, and then make sure you are in an income-contingent repayment plan for the 120 months. Parent PLUS loans do not otherwise qualify if not consolidated into the direct loan program.
Parent PLUS Loan Forgiveness for Teachers
Other programs for community service jobs that carry student loan forgiveness may or may not be eligible for Parent PLUS loans. Parent Plus Loans are not eligible for the Teacher Loan Forgiveness Program. However, some teachers may still qualify for relief under PSLF. People in many professions such as some doctors, nurses, lawyers and others may quality under PSLF.
Parent PLUS Loan Forgiveness for Nurses & Other Jobs
There are many programs that offer forgiveness of student loans for service including LRAPS (Loan Repayment Assistance Programs) sponsored by universities and states. For more information, see our article Jobs That Offer Student Loan Forgiveness. For information about nurses in particular, see our article, Student Loan Forgiveness for Nurses. You will want to check into the program that interests you to find out if Parent PLUS Loans qualify, because these programs all have different criteria.
Parent PLUS Loan Forgiveness Through Disability Discharge
Should the parent who took out Parent PLUS loans become permanently and totally disabled, they are eligible to have their Parent PLUS loans discharged. Because it is the parent who is responsible for repayment, it is the parent that must prove their own disability. Their child’s physical and mental condition is irrelevant to getting forgiveness. Be aware that due to a recent change in the law, student loan debt discharged due to disability or death is no longer taxable.
How to Apply for a Disability Discharge
If you would like to apply for a total and permanent disability (TPD) discharge, you can apply online with Nelnet, which assists in administering the TPD discharge process. You can call Nelnet seven days a week at 1-888-303-7818 from 8 a.m. to 8 p.m. Eastern time or email them at firstname.lastname@example.org.
Parent PLUS Loans May Be Forgiven if the Parent or the Child Dies
If you die or your child who benefitted from the Parent PLUS Loan dies, the loan may be eligible for a death discharge. The loan servicer must be provided with proof of death which can be in the form of an original death certificate, a certified copy of the death certificate, or a photocopy of either. Contact your loan servicer to check on further documentation requirements.
Parent PLUS Loans May Be Forgiven in Bankruptcy if You Qualify
It may be possible to discharge Parent PLUS Loans in a Chapter 7 bankruptcy if you are able to prove that paying them would subject you to “undue hardship.” Since a Parent PLUS loan is the parent’s responsibility, it is necessary to show an undue hardship for the parent, not the child. For more information about proving undue hardship, see our article Undue Hardship – The Path to Get Student Loans Discharged in Bankruptcy.
Refinancing Instead of Forgiveness
It’s not forgiveness, but if your child is doing well financially, and you are struggling, you could ask your child to refinance your Parent PLUS loans in their name. Your child would need to apply to a private lender for refinancing and meet their credit history requirements. Often times private loans have less flexible repayment plans, but much better interest rates than federal student loans.
Income Contingent Repayment (ICR)
ICR is a program where you are able to pay back loans at the lesser of 20 percent of your discretionary income or what you would pay on a repayment plan with a fixed payment over the course of 12 years adjusted according to your income. If your loan is not completely repaid after 25 years, the remainder is forgiven.
Parent PLUS loans are not technically eligible, but there is a workaround. You can consolidate your Parent PLUS loans into a Direct Consolidation loan, which enables you to qualify for the ICR plan. You may be able to get a Direct Consolidation Loan whether you have PLUS loans through the William D. Ford Federal Direct Loan Program (Direct Loans) or the Federal Family Education Loan Program (FFEL). Also, even if you have only one PLUS loan, you can still use Direct Consolidation to make it eligible for forgiveness.
Parent PLUS Loans May Be Forgiven Under Other Special Circumstances
All or part of your Parent PLUS loan may be discharged if you find yourself in any of these situations:
- The school closed so your child could not complete their program.
- The school wrongly certified your eligibility to receive the loan.
- Your eligibility to receive the loan was falsely certified through identity theft.
- Your child withdrew from school, but the school refused to give a refund required under the law.
- The student withdrew from school, but the school didn’t pay a refund of your loan required under the law.
Analyze Your Finances Before Taking Out a Parent PLUS Loan
Before you take out a Parent PLUS loan, give it careful thought. You, not your child, will be legally responsible for its repayment. When your child graduates from college, their career will be just beginning. Depending on your age and circumstances, your career may be winding down, and payments may be harder to make as the years roll by. Though it is possible in some situations, you cannot depend on getting Parent PLUS loan forgiveness.