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.
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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.
Compare the Best Student Loan Refinance Rates
Here are our top student loan refinance picks for 2019
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Student Debt Relief Loan Refinancing Advertiser Disclosure
College Ave: College Ave Student Loans products are made available through either Firstrust 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.
College Ave Refi Education loans are not currently available to residents of Maine.
1 – The 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.
2 – $5,000 is the minimum requirement to refinance. The maximum loan amount is $300,000 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 04/26/2019. Variable interest rates may increase after consummation.
3 – This informational repayment example uses typical loan terms for a refi borrower with a Full Principal & Interest Repayment and 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.
ELFI: Subject to credit approval. Terms and conditions apply. To qualify for refinancing or student loans consolidation through ELFI, you must have at least $15,000 in student loan debt and must have earned a bachelor’s degree or higher from an approved post-secondary institution.
LendKey: Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
CommonBond: Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown. All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate.
Splash Financial: Terms and Conditions apply. Splash reserves the right to modify or discontinue products and benefits at any time without notice. Rates and terms are also subject to change at any time without notice. Offers are subject to credit approval.com
Earnest: 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.
Earnest’s fixed-rate loan rates range from 3.89% APR (with autopay) to 7.89% APR (with autopay). Variable rate loan rates range from 2.50% APR (with autopay) to 7.27% APR (with autopay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms of 10 years or less. For loan terms of 10 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% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 0.26% and 5.03% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of April 23, 2019 and are subject to change based on market conditions and borrower eligibility.
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.
The information provided on this page is updated as of 04/23/19. 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@example.com, or call 888-601-2801 for more information on our student loan refinance product.