Parent Loan Forgiveness Basics PLUS
The timing and conditions for qualifying for student loan forgiveness can be confusing. Just take this statistic: As of the summer of 2018, only 289 of the nearly 29,000 people who applied for government service loan forgiveness were approved. This is 99% of failures .
It is clear that this is not an easy approval process. Which answers this question via email from Shelby, a reader of Two Cents:
My father took a significant amount of money for me and my brother back in 2008-2010, and due to the recession, I don’t think he has made much progress, if any, in reimbursing it. Despite the fact that friends / financial advisers at my school assured me that these were his loans, I still fear that the debt will one day fall on me. I wonder if there is a chance that this debt will one day become mine, and if you heard about forgiveness or support from Parent PLUS, I could get on my father’s radar that this is not a scam.
This tip is tailored to Shelby’s situation, but it may also apply to you if you are interested in tracing forgiveness on your federal student loans.
Parent PLUS Loans are federal student loans taken out by a parent or guardian to cover the costs of educating dependent children, and therefore the responsibility for paying is the parent, not the child. It is possible for Parent PLUS loans, like other federal loans, to be forgiven. Whether your father is the right fit for this, however, is another matter.
“Parent PLUS loan forgiveness is available through programs that include income-based payments and government service loan forgiveness,” wrote Teddy Nikiel, student loan expert at NerdWallet, in an email. “But, as with all legitimate student loan forgiveness programs, help doesn’t come right away.”
Your father will need to make payments on time for a minimum of ten years and will have to adhere strictly to the program requirements. As the statistics above show, even the most disciplined borrowers have failed to qualify. Not that it means your dad could never have done it, but it’s not an easy process. You can read more about forgiveness options here .
Depending on your dad’s circumstances, it may be wiser for him to consider refinancing or switching the payment plan to something more manageable. “The income-driven repayment plan caps payments to 20 percent of the borrower’s discretionary income, or the amount they would pay under a 12-year fixed repayment plan, whichever is less,” writes Nikiel.
Your father will have to pay off the loan, not you. “There is no chance that a PLUS parent loan could become the student’s responsibility, unless the student refinances the loan on his own behalf through a private lender,” she says. “The PLUS loan can be repaid if the parent is permanently disabled or if the parent or student dies.” You can read about it here . Refinancing with a private lender also takes away your chance of forgiveness.
So it can be said that Parent PLUS loans can be forgiven, but it is not an easy process. Your dad should call his service staff and see if they can help him get on the path that works best for him.