In the realm of student loans, the Parent PLUS Loan program offers a unique solution for parents of dependent undergraduate students. But what happens when it comes to loan forgiveness? Are Parent PLUS Loans eligible for the same benefits as other federal student loans? Let's delve into the details and provide a comprehensive overview of Parent PLUS Loan forgiveness options.
The Parent PLUS Loan program allows parents to borrow money to cover their child's educational expenses. These loans are available to parents regardless of income or credit history. However, unlike other federal student loans, Parent PLUS Loans are not eligible for all loan forgiveness programs.
While Parent PLUS Loans may not be eligible for some loan forgiveness programs, there are still options for parents seeking relief from their debt. Stay tuned as we explore the available options and provide valuable insights for navigating the complex world of Parent PLUS Loan repayment and forgiveness.
Are Parent PLUS Loans Eligible for Loan Forgiveness
Parent PLUS Loans have unique repayment and forgiveness considerations. Here are 9 important points to know:
- Not eligible: Parent PLUS Loans are not eligible for federal loan forgiveness programs.
- Income-driven repayment: Available to Parent PLUS Loan borrowers.
- Public service: Forgiveness possible after 10 years of qualifying employment.
- Teacher forgiveness: Available to Parent PLUS Loan borrowers who teach full-time for 5 years.
- Disability: Discharge possible for borrowers with a total and permanent disability.
- Death: Discharge available if the borrower passes away.
- Closed school: Discharge possible if the school closes while the borrower is enrolled.
- Bankruptcy: Parent PLUS Loans cannot be discharged in bankruptcy.
- Deferment and forbearance: Available to Parent PLUS Loan borrowers who meet certain criteria.
If you have questions about Parent PLUS Loan forgiveness or repayment options, contact your loan servicer or the U.S. Department of Education.
Not eligible: Parent PLUS Loans are not eligible for federal loan forgiveness programs.
While other federal student loans may offer forgiveness options, Parent PLUS Loans are excluded from these programs. This means that borrowers who have taken out Parent PLUS Loans cannot have their debt forgiven through programs such as Public Service Loan Forgiveness, Teacher Loan Forgiveness, or Income-Driven Repayment Forgiveness.
- No Public Service Loan Forgiveness:
Public Service Loan Forgiveness forgives the remaining balance of federal student loans after 10 years of working full-time in public service. However, Parent PLUS Loans are not eligible for this program.
- No Teacher Loan Forgiveness:
Teacher Loan Forgiveness forgives up to $17,500 in federal student loans for teachers who work full-time for five consecutive years in a low-income school. Again, Parent PLUS Loans do not qualify.
- No Income-Driven Repayment Forgiveness:
Income-Driven Repayment Forgiveness forgives the remaining balance of federal student loans after 20 or 25 years of making monthly payments under an income-driven repayment plan. Unfortunately, Parent PLUS Loans are ineligible for this program as well.
- No Perkins Loan Forgiveness:
Perkins Loan Forgiveness is available for borrowers who work in certain public service jobs. However, Parent PLUS Loans are not considered Perkins Loans and are therefore not eligible for forgiveness under this program.
The exclusion of Parent PLUS Loans from federal loan forgiveness programs can be a significant challenge for borrowers who are struggling to repay their debt. However, it is important to remember that there are other options available for Parent PLUS Loan borrowers who are experiencing financial hardship, such as deferment, forbearance, and income-driven repayment plans.
Income-driven repayment: Available to Parent PLUS Loan borrowers.
While Parent PLUS Loans are not eligible for federal loan forgiveness programs, borrowers do have the option of enrolling in an income-driven repayment plan. These plans cap monthly payments at a percentage of the borrower's discretionary income, making them more affordable for borrowers who are struggling to repay their debt.
- Pay As You Earn (PAYE):
Under PAYE, monthly payments are capped at 10% of the borrower's discretionary income. After 20 years of payments, any remaining balance is forgiven.
- Revised Pay As You Earn (REPAYE):
REPAYE is similar to PAYE, but it offers more flexibility in terms of the repayment period. Monthly payments are capped at 10% of discretionary income, and any remaining balance is forgiven after 20 or 25 years, depending on the borrower's income.
- Income-Based Repayment (IBR):
IBR caps monthly payments at 15% of the borrower's discretionary income. After 25 years of payments, any remaining balance is forgiven.
- Income-Contingent Repayment (ICR):
ICR caps monthly payments at 20% of the borrower's discretionary income. However, there is no forgiveness available under this plan, and the repayment period is longer than other income-driven plans.
Borrowers who are struggling to repay their Parent PLUS Loans should contact their loan servicer to learn more about income-driven repayment plans and to determine which plan is the best fit for their financial situation.
Public service: Forgiveness possible after 10 years of qualifying employment.
While Parent PLUS Loans are not directly eligible for Public Service Loan Forgiveness (PSLF), there is a way for Parent PLUS Loan borrowers to access this program. If the borrower consolidates their Parent PLUS Loans into a Direct Consolidation Loan and then work full-time in public service for 10 years, they may be eligible for PSLF.
- Consolidate loans:
To be eligible for PSLF, Parent PLUS Loans must be consolidated into a Direct Consolidation Loan. This can be done through the U.S. Department of Education's Federal Student Aid website.
- Qualifying employment:
To qualify for PSLF, borrowers must work full-time for a qualifying public service employer. This includes government agencies, non-profit organizations, and certain other public service organizations.
- Make 120 qualifying payments:
Borrowers must make 120 qualifying payments on their Direct Consolidation Loan while working full-time in public service. Payments must be made on time and in full to count towards PSLF.
- Apply for forgiveness:
After making 120 qualifying payments, borrowers can apply for PSLF through the U.S. Department of Education. Forgiveness is typically processed within a few months.
PSLF can be a great option for Parent PLUS Loan borrowers who work in public service and who are struggling to repay their debt. However, it is important to note that the process can be complex and time-consuming. Borrowers should carefully review the PSLF requirements and make sure they are eligible before consolidating their loans.
Teacher forgiveness: Available to Parent PLUS Loan borrowers who teach full-time for 5 years.
Parent PLUS Loan borrowers who are teachers may be eligible for loan forgiveness through the Teacher Loan Forgiveness Program. This program forgives up to $17,500 in federal student loans, including Parent PLUS Loans, for teachers who work full-time for five consecutive years in a low-income school or educational service agency.
To be eligible for Teacher Loan Forgiveness, borrowers must meet the following requirements:
- Be employed as a full-time teacher for five consecutive years in a low-income elementary or secondary school, educational service agency, or Bureau of Indian Education school.
- Be certified by the state in which they teach.
- Teach core academic subjects, such as English, math, science, history, or social studies.
- Have a Direct Loan or Stafford Loan (including Parent PLUS Loans).
- Not be in default on their loans.
Borrowers who meet all of the eligibility requirements can apply for Teacher Loan Forgiveness through the U.S. Department of Education. Forgiveness is typically processed within a few months.
Teacher Loan Forgiveness can be a great option for Parent PLUS Loan borrowers who are working in low-income schools and who are struggling to repay their debt. However, it is important to note that the program is competitive and not all applicants will be approved.
For more information on Teacher Loan Forgiveness, including eligibility requirements and the application process, please visit the U.S. Department of Education's website.
Disability: Discharge possible for borrowers with a total and permanent disability.
Parent PLUS Loan borrowers who become totally and permanently disabled may be eligible for a discharge of their loans. This means that the borrower will no longer be responsible for repaying the loan.
To be eligible for a disability discharge, borrowers must meet the following requirements:
- Be unable to work due to a physical or mental impairment that is expected to last for at least 60 months or result in death.
- Have a doctor certify the disability.
- Submit an application for disability discharge to the U.S. Department of Education.
If the borrower is approved for a disability discharge, the remaining balance of their Parent PLUS Loan will be forgiven. The borrower will no longer be required to make payments on the loan, and any outstanding collections will be stopped.
Disability discharge can be a significant relief for Parent PLUS Loan borrowers who are unable to work due to a disability. However, it is important to note that the process can be complex and time-consuming. Borrowers should carefully review the eligibility requirements and make sure they have all of the necessary documentation before applying for a disability discharge.
For more information on disability discharge, including eligibility requirements and the application process, please visit the U.S. Department of Education's website.