How to Get Rid of a Parent PLUS Loan Without Paying for It
Even though there are tons of tremendous Federal Student Loan Forgiveness Programs on offer this year, Parent PLUS Loans remain the one type that’s far harder to get discharged.
Unfortunately, the Government seems to have taken the opinion that Parents don’t deserve the same kinds of benefits that their children have access to, and even though this is one of the fastest growing categories for student loan debt, it doesn’t look like any major changes will be introduced as long as President Trump remains in office.
However, while it is difficult to discharge a Parent PLUS Loans, it’s not impossible, and this page will explain exactly what you need to do to get rid of that debt as quickly and affordably as possible.
But Before I Explain how Parent PLUS Forgiveness Works…
Let me fill you in on an important secret that your loan servicer doesn’t want you to know: the best way to get rid of your loans as quickly and cheaply as possible is to pay an expert to evaluate your options, and come up with a repayment strategy that’s specific to your situation.
You may see people online arguing against paying people for help with your debt, but there’s a huge benefit to getting a reputable consultant to review your loans, your situation, and match you up with the right forgiveness, discharge, consolidation, deferment or forbearance programs that will save you money!
The most important thing to keep in mind is that you shouldn’t trust just anyone to handle giving your this advice, and that you need to work with a person or company who will actually look out for your best interests.
Personally, I refer all of my readers to the Student Loan Relief Helpline, a group of debt experts who can review your case, determine what you should do, then help you get on track to becoming debt free as quickly, and affordably as possible.
While you will need to pay the Helpline a few hundred dollars for their expertise and advice, I’ve heard of cases where they saved my readers tens of thousands of dollars over the lifespan of their loans, so I think it’s entirely worth the cost.
To get effective, affordable help with your student debt, call the Student Loan Relief Helpline now at: 1-888-906-3065.
Parent PLUS Student Loan Forgiveness via the Income-Contingent Repayment Plan
Most Federal loans allow you to qualify for forgiveness programs by using a combination or working the right job, and getting your loan on the right repayment plan.
With Parent PLUS Loans, it’s no different. The trick is that you can only qualify for ONE of the several available Income-Based Student Loan Repayment Plans: the Income-Contingent Repayment Plan (ICR).
There’s one quick trick, however, that you’ll need to take advantage of in order to get your Parent PLUS Loan enrolled in the Income-Contingent Repayment Plan.
Technically, Parent PLUS Loans are NOT eligible for any income-based repayment plans, including ICR, but Parent PLUS loans ARE eligible to be consolidated under the Federal Direct Consolidation Loan Program, and Direct Consolidation Loans ARE eligible for Income-Contingent Repayment.
Did you catch that? What you’ll need to do is consolidate your Parent PLUS Loan into a Direct Loan, then get your Direct Loan enrolled in the Income-Contingent Repayment Plan, and you’ll be automatically eligible for complete forgiveness after 25 years of monthly payments have been made.
One thing to keep in mind here is that the ICR plan will reduce your monthly payments (if you don’t make much money), but that could lead to inflating your total outstanding debt, and because you’ll have to pay IRS income taxes on the amount of debt you have forgiven, this could end up being a significant amount of money.
For details on how that process works, take a look at my page on Student Loan Forgiveness & Taxable Income.
Parent PLUS Student Loan Forgiveness via the Public Service Loan Forgiveness Program
To get rid of your Parent PLUS Loan faster – much faster, in fact, and have it eliminated after making just 10 years worth of payments, you’ll need to find a way to qualify for the Public Service Loan Forgiveness Program (PSLF).
This program was created to incentivize working in the Public Service sector, and is available to people who have a qualifying “Public Service” job, which includes anyone who works for the Government at any level (Federal, State or Local), anyone who works for a 501(c)(3) Non-Profit, and anyone who serves in the Military.
Other types of jobs that qualify for PSLF can include certain Teaching or Nursing positions, some Legal positions, some Doctors, Dentists and other Medical roles, some Attorneys, Paralegals and other specialty legal positions, anyone who works in Public Safety or Law Enforcement, Firefighters, Park Rangers, and a variety of other similar jobs.
To take advantage of PSLF, you’ll have to do the same thing I outlined above in the slow option section, which is to first turn your Parent PLUS Loan into a Direct Consolidation Loan, then enroll in the Income-Contingent Loan Repayment Plan, and finally apply for PSLF.
The great thing about using PSLF to get rid of a Parent PLUS Loan is that it wipes the debt out in just 10 years AND allows you to avoid having to pay any taxes on the amount of debt that you end up getting forgiven.
The difficult thing about PSLF is that it does require working full-time on a qualifying role, so you may have to consider a career change in order to take advantage of the program.
Parent PLUS Student Loan Discharges
If you don’t qualify for either of the Parent PLUS loan forgiveness options outlined above, you may still be able to wipe out that debt if you can find a way to qualify for one of the Discharge programs listed below.
Discharge programs work slightly different from Forgiveness programs, but do basically the same thing; allow you to wipe out, eliminate, and completely forget about your student debt.
The issue with Discharge programs is that they tend to be much harder to qualify for than Forgiveness programs, requiring very specific eligibility conditions to bet met before you can qualify to have your loan eliminated.
For Parent PLUS Loans, you’ll want to look into the following Discharge options:
- The Total & Permanent Disability Discharge Program
- The Death Discharge Program
- Federal Student Loan Bankruptcy Discharges
- The Closed School Loan Discharge Program
- The Borrower’s Defense Against Repayment Program
As I just mentioned, none of the above Discharge programs are easy to qualify for, but all of them do allow you to completely eliminate a Parent PLUS Loan, so let’s go through the eligibility conditions required to qualify for each of these.
The Total & Permanent Disability Discharge Program
Qualifying for the Total & Permanent Disability Discharge Program is no easy task, but it is one that is entirely worth it as you’ll be eligible to write off all Federal student debt that you owe, including Parent PLUS Loans.
Called a TPD Discharge, this program allows you to eliminate your Federal student loan if you can prove that you won’t be able to work, make money, and afford to make monthly loan payments
Unfortunately, since it’s the Parent who is responsible for making the monthly payments under a Parent PLUS Loan, the Parent has to be the person who becomes totally and permanently disabled in order to qualify for this benefit.
That means that even if your child you borrowed the money for becomes totally and permanently disabled after you’ve taken out the loan, you still won’t qualify for a TPD discharge, since you’re the person responsible for issuing monthly payments.
One other bright side about a TPD discharge is that you don’t end up owing any taxes on the discharged debt, so you could write off hundreds of thousands of dollars due to a total and permanent disability discharge, then walk away from that debt without owing the IRS a single penny.
For details on the Total and Permanent Disability Discharge Program, go here.
The Death Discharge Program
While no one wants to qualify for a discharge via the Death Discharge Program, as there’s nothing worse than losing a loved one, I do want to point out the fact that if either the child the loan was taken out for, or the parent who borrowed the money dies, then a Death Discharge will be in order.
This requires providing your Student Loan Servicing Company with a Proof of Death, which means giving them Death Certificate, but in the unfortunate event that death occurs for the child or parent borrower, this is a path worth investigating.
Each Servicing Company has a different process for handling a Student Loan Death Discharge, so to find out exactly what you’ll need to do to qualify for one, the first order of business is getting in touch with your Servicer and asking them for details on the application process.
Honestly, I hope you’re able to qualify for any other benefit program other than the Death Discharge, and I considered leaving it out of this page since it’s so morbid, but things do happen, and for the small percentage of people who do experience this sort of difficulty, it’s certainly worth utilizing the program for its intended purpose.
For full details on how a Death Discharge works, visit the official Federal Student Aid website here.
The Federal Student Loan Bankruptcy Discharge Program
It’s never easy to Get Rid of a Federal Student Loan via Bankruptcy, but if you are one of the lucky people who do end up qualifying for a Bankruptcy Discharge, you’ll certainly want to take advantage of the benefit.
The way this process works is that you have to include your Federal Student Debt in the debt you’re seeking to eliminate via bankruptcy proceedings, then pass something called an “Undue Hardship Test” which proves that your student debt is such a burden on your finances that it’s threatening your very ability to provide yourself and/or your family with the basic necessities for living – food, shelter and clothing.
As you can imagine, this is a terribly difficult test to pass, and since the Parent PLUS Loan is the responsibility of the parent borrower, requires proving that the parent’s life is being destroyed by debt.
For full details on how to pursue an Undue Hardship Discharge, take a look at my Guide to Qualifying for a Federal Student Loan Bankruptcy Discharge.
The Closed School Discharge Program
The Closed School Student Loan Discharge Program is an excellent way to eliminate student debt when the student was not able to complete their higher education program because the school shut down before they could finish all the classes required for graduation.
This circumstance tends to be quite rare, but in recent years there have been plenty of times when especially big for-profit schools like Corinthian Colleges (Everest, Heald and WyoTech), ITT Tech, Westwood College, Le Cordon Bleu, Kaplan University, Anthem College, Brown Mackie College and Brightwood College decided to close their doors with little warning, leaving hundreds of thousands of students without the chance to finish their degrees.
The trick to getting a Closed School Discharge is that the student who the Parent PLUS Loan was borrowed to pay for must have still been actively enrolled in the school within 120 days of their campus’s official closure date.
The beauty of this program, however, is that if your child was still enrolled within that 120 day window of the time their school shut down, you’ll be eligible to apply for a Closed School Discharge, and get the entirety of your Parent PLUS Loan eliminated.
For full details on how this program works, take a look at my Guide to Closed School Student Loan Discharges.
The Borrower’s Defense Against Repayment Program
One of the best ways to eliminate a Parent PLUS Loan is to prove that it shouldn’t have ever existed in the first place, and that the loan was only taken out because the school committed some form of fraud against your child, and/or yourself.
Borrowers Defense Discharges are not easy to come by, because they require submitting a detailed, legal application to the Department of Education, who reviews the specifics of your case, and determines whether or not they feel that your loan should be eliminated.
Because that process requires a manual review, there is a tremendous amount of subjectivity to the Borrower’s Defense Approvals process, and I’ve seen a huge variance in terms of how easy is it is for people to get their debt wiped clean.
This is a complicated program requiring a great deal of research, evidence collection, and paperwork, so I won’t try to explain it all here, but for the full details on applying for a BDAR discharge, please visit my Guide to Getting a Borrower’s Defense to Repayment Discharge Approved.
Other Financial Relief Options for Parent PLUS Loans
While the processes outlined above are technically the only ways to earn forgiveness or a discharge for a Parent PLUS Loan, there are still several other ways to help reduce the financial burden of Parent PLUS debt.
These programs won’t let you eliminate the outstanding balance of your loan, but they will help save you money by doing things like decreasing your monthly payments, pausing monthly payments, and basically making your debt more affordable, at least in the short-term.
The most popular ways to reduce your monthly payments and near-term debt burden for Parent PLUS Loans are:
- Student Loan Refinancing
- Student Loan Deferments
- Student Loan Forbearances
- Changing Your Student Loan Repayment Plan
Parent PLUS Loan Refinancing
One relatively easy option for reducing the burden of a Parent PLUS Loan is to simply transfer the debt into your child’s name, and make them responsible for dealing with it.
Now, you can’t do this unilaterally, so your child will have to agree that this is a good idea, and they will be the one who has to actually apply for student loan refinancing, and who must be approved by the lender to take on that debt burden from you.
But this could be a great idea if your child is able to qualify for an interest rate lower than the standard offered to Parent PLUS Loan borrowers, which is 7%.
During the refinancing process, your child will also be able to update the terms of their loan, with options for doing things like changing the repayment term to make it longer, or shorter, depending on what they’re trying to accomplish.
The trick to determining if this is a good idea or not is to remember that refinancing the debt will turn it into a private student loan, which destroys any eligibility for utilizing Federal benefit programs, like the Deferments and Forbearances I’m about to explain, as well as PSLF and the other forms of Federal loan Forgiveness and Discharges I outlined above.
Parent PLUS Loan Deferments
Pretty much all Federal student loans are eligible for deferments, which allow you to put your loan repayment process on pause, and basically stop issuing monthly payments for some set period of time.
Now, with that said, you can’t just say “I want a Deferment”, but you have to qualify for a specific type of Deferment, typically by proving that you’re having trouble making those monthly payments.
In addition to needing to qualify for a Deferment, you should also be aware that putting your loans on pause means you’ll pay less in monthly fees now, but more in interest and total repayments later.
Why? Because for most loans, and Parent PLUS Loans included, interest charges and fees continue to accumulate even while your loans are in Deferment, and at the end of the Deferment period, those added costs are capitalized, meaning added to your total debt.
For full details on Deferments work, please view my Guide on Federal Student Loan Deferments.
Parent PLUS Loan Forbearances
Federal Student Loan Forbearances are almost identical to Deferments, except that they’re called “Forbearances”.
Honestly, I don’t know why they have two separate programs that offer the same basic benefit, the ability to put your loans on pause and stop making monthly payments for a set period of time.
The only real difference I can find about Forbearances is that they’re easier to qualify for, and that they ALWAYS lead to interest accumulation, and thus capitalization, meaning that even though they allow you to temporarily stop paying your debt, you’ll end up owing more in the long-run.
For full details on how Forbearances work, including the specific types available, application instructions, and pros and cons, please view my Guide to Federal Student Loan Forbearances.
Parent PLUS Loan Repayment Plans
The fastest and easiest way to reduce monthly payments for a Parent PLUS Loan is to simply change your Federal Student Loan Repayment Plan to one that offers better repayment terms.
And while that obviously isn’t as good as earning complete forgiveness, at least this could make your loan affordable in the short-run, giving you some breathing room to afford other things.
Unlike the Deferments and Forbearances listed above, changing your Repayment Plan doesn’t pause your loans, but restructures how you pay them off, sometimes giving you more total time to make the payments, sometimes setting payments based on income, or sometimes giving you smaller payments now in return for larger payments in the future.
In addition to the Standard Repayment Plan, which is the default for Parent PLUS Loans, and requires paying off your debt in 10 years, there are also two other easily accessible Plans, called:
- The Graduated Student Loan Repayment Plan
- The Extended Student Loan Repayment Plan
Let’s go through the details of how each of these Repayment Plans work next.
The Graduated Student Loan Repayment Plan
The Graduated Student Loan Repayment Plan is pretty simple, and was created for people who don’t make much money now, but who think they will make substantially more later.
Essentially, it lets you make small payments at the beginning of your loan repayment term, which build over time into much larger payments several years out in the future.
In the beginning, your payments will be at or just above the interest-only level, making sure that you aren’t accumulating more debt each month, since you’re paying at least the amount that is building in terms of interest fees.
This then builds up over time, with payment increases going into effect every two years to the point that your final payment is substantially higher than the initial payment, but which is capped at being up to only 3 times higher than the first payment.
For full details on how this plan works, please visit my Guide to the Graduated Student Loan Repayment Plan.
The Extended Student Loan Repayment Plan
The Extended Student Loan Repayment Plan lets you extend the amount of time you have to pay off your loan, from the 10 year Standard plan, to a term of 12, 15, 20, 25 or even 30 years.
The amount of time you’re able to extend is based on the amount of money that you owe, with bigger total debts being allowed to get repaid over longer periods of times
This obviously reduces your monthly payments, but again, while it means you’ll owe less each month in the short-term, it also means you’ll owe more over the course of your loan, since it gives more time for interest charges to accumulate.
Before agreeing to alter your repayment plan, the first thing you should do is play around with a Student Loan Repayment Calculator to determine which plan is truly going to work best for you, not just in the near-term, but over the lifespan of your loan.
Have Other Questions About Student Debt?
I built this website to help people Get Rid of Student Debt Without Paying for It, and over the past decade I’ve developed over 100 detailed Guides covering all the different parts of the repayment process.
To help you get rid of debt as quickly as possible, make sure to look at some of my other Guides, which cover the best ways to handle both Federal and Private student loans.
For Help with Federal Student Loans, you should visit my Guides on:
- Federal Student Loan Forgiveness Programs
- Federal Student Loan Bankruptcies
- Federal Student Loan Consolidations
- Federal Student Loan Delinquencies & Defaults
- Federal Student Loan Rehabilitation
- Federal Student Loan Wage Garnishments
- Federal Student Loan Deferments
- Federal Student Loan Forbearances
- Federal Student Loan Repayment Plans
And if you need Help with Private Student Loans, be sure to look at my Guides on:
- Private Student Loan Forgiveness Programs
- Private Student Loan Consolidations
- Private Student Loan Bankruptcies
- Private Student Loan Default Help
Alternatively, if you have any other questions about student debt, please feel free to post them in the Comments section at the very bottom of this page.
I review Comments daily, and I’ll do my best to get you a response as soon as possible!
NOTE: Please do not attempt to contact me via email or Facebook, as I will ONLY respond to Comments posted here on FSLD.
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Disclaimer:Information obtained from Forget Student Loan Debt is for educational purposes only. You should consult a licensed financial professional before making any financial decisions. This site receives some compensation through affiliate relationships. This site is not endorsed or affiliated with the U.S. Department of Education.