The U.S. Department of Education offers direct loans specifically for parents of college students, called Parent PLUS loans. Like with other federal student loans, only a few special circumstances qualify parents for loan forgiveness.
Learn more about how Parent PLUS loans work, how to qualify for loan forgiveness and other higher education borrowing tips for parents.
What Is a Parent PLUS Loan?
Parent PLUS loans are part of a federal loan program in which parents borrow funds to help pay for their child’s college expenses. Unlike with other student loans, the parent takes on the full repayment obligation with Parent PLUS loans, explains Katherine Presutti, executive director of financial aid and strategic analytics at the University of Hartford.
“Upon the student’s graduation, the parent is then responsible for repaying that loan,” Presutti says.
What sets this financing apart from other federal student loan programs is that a credit history check is performed on parents to make sure they don’t have adverse credit items like foreclosures or bankruptcies. However, the credit score doesn’t matter in the same way that it might for other types of borrowing, since everyone gets the same interest rate. “If a parent has no credit, they can still be approved because they do not have adverse credit,” says Sarah Austin, policy analyst at the National Association of Student Financial Aid Administrators.
Unlike other federal student loan programs, there’s also no cap on borrowing amounts. The limit for Parent PLUS loans is defined as the total cost of attendance at the school the child attends minus any other financial assistance the child receives.
As such, the potential amount of loan debt a parent could take on is very high, especially over a number of years and with multiple children, says Austin. “It’s important for parent borrowers to understand what repayment looks like,” Austin says. She encourages borrowers to use the Loan Simulator tool on the StudentAid.gov website.
According to data from the U.S. Department of Education, 3.6 million people hold Parent PLUS loans. About 7% of federal student loan debt is from Parent PLUS loans borrowed by parents on behalf of their children, according to the Education Data Initiative.
[Read: Best Parent Student Loans: Parent PLUS and Private.]
Are Parent PLUS Loans Eligible for Forgiveness?
There may be some opportunities for Parent PLUS loan forgiveness, which can help alleviate a debt burden — especially as borrowers reach retirement age. “While forgiveness options are limited compared to other federal student loans, it’s important for borrowers to understand what is available,” says Beth Johnson, director of student financial assistance, Miami University.
[Read: Best Private Student Loans.]
Public Service Loan Forgiveness. The Public Service Loan Forgiveness, or PSLF, program is intended for borrowers who are employed full-time by a government agency or not-for-profit organization.
The process involves consolidating all of your Parent PLUS loans into a direct consolidation loan and switching to the income-contingent repayment, or ICR, plan. In addition, you’ll have to make 120 on-time payments — 10 years of monthly payments — on the loan before it’s eligible for forgiveness.
“There is a backlog of PSLF applications,” warns Austin. “If a parent borrower was pursuing this, it’s quite possible they will see a delay.”
Income-contingent repayment. Another avenue for Parent PLUS loan forgiveness is switching to the ICR plan. The main benefit of this option is that it can make your monthly payment more affordable, as it is capped at 20% of your discretionary monthly income. The downside of this route is that you have to pay for 25 years before the remaining debt is forgiven.
“As parents are considering which repayment plan to choose, extending the life of the loan does mean paying back more in interest. In the long run, you end up paying more that way,” says Presutti. However, she noted, many low-income families can significantly lower their monthly payment, and therefore may still have remaining debt 25 years later, so the forgiveness at that point can still be beneficial.
Regarding federal financial aid being tied up in litigation, a recent court injunction has put ICR loan forgiveness on pause, says Austin. “Only loans enrolled in income-based plans are being processed right now for time-based loan forgiveness.”
Death or disability. Parent PLUS loans are discharged if the borrower becomes totally and permanently disabled or passes away. The loan would also be discharged if the student for whom you borrowed dies.
School closure. Your Parent PLUS loan can be discharged if the school your student is attending closes before they complete their program of study. You can also seek discharge if the school falsely certified your loan eligibility or didn’t refund your loan money after your child dropped out.
[Read: Best Student Loans for Bad Credit. ]
Should You Choose a Parent PLUS Loan?
Every family’s financial situation is different, so it’s important to understand all of your options.
If you work for a government or not-for-profit organization and can qualify for PSLF, PLUS loans are worth investigating.
That said, if you have excellent credit or earn too much to be eligible for loan forgiveness, private loans may be the better route. Private lenders allow students to borrow with a parent co-borrower and may offer a better interest rate than the Parent PLUS loan.
“I advise families to borrow conservatively and consider future repayment responsibilities before taking on Parent PLUS loans,” says Johnson.
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Parent PLUS Student Loan Forgiveness: What You Should Know originally appeared on usnews.com
Update 06/13/25: This story was previously published at an earlier date and has been updated with new information.
