Options for repaying your Parent PLUS loans
Parent PLUS loans offer fewer options and protections than other federal student loans. There is still room to choose a strategy that works for you.
Find answers for your situation:
What if the payments are too high on my Parent PLUS loan?
If you're struggling to make payments, you can take action to make your loans affordable and stay out of default.
First, check if you qualify for lower payments
Consolidating your Parent PLUS loan will make you eligible for the Income-Contingent Repayment (ICR) plan. Use the Education Department’s Loan Simulator to estimate your payment on the ICR plan. The minimum payment on ICR is just $5.
If you have federal student loans for your own education, do not consolidate them with your Parent PLUS loans. You will lose repayment plan options and restart the clock on PSLF and other forgiveness programs. You can learn more about the consolidation process here .
Act quickly to avoid default. Default can result in consequences like garnishment of your wages, federal tax return, or Social Security.
Next, set yourself up to stay on track
- Set a reminder to recertify your ICR plan in a year
- Consider the consequences before refinancing into a private loan with a lower interest rate.
- You will lose the flexible repayment options and borrower protections offered by federal student loans if you turn it into private debt. Find out more about how you can avoid problems and wasting money.
Explore other situations
- See tips to avoid scams, save money, and pay off student debt faster
- If you're in the military or work for a government or nonprofit organization, learn about public service loan forgiveness
- Have another type of loan? Review options again for more advice
How do I get Parent PLUS loans out of default?
If you heard from a debt collector about your Parent PLUS loans, don’t panic. Your loans are likely in default, meaning you missed about 9 monthly payments. You have options for getting out of default and moving forward with your loans.
First, decide how to deal with the default
Once the debt collector has validated that you owe this money, start considering your options. If you can’t pay off the loan immediately, you have two options: rehabilitation and consolidation .
- Rehabilitation: After 9 months of reasonable payments (based on your income), your loan will be in good standing. Rehabilitation removes the default note from your credit report. A defaulted loan can only be rehabilitated one time.
- Consolidation is much faster, which may be important if you want to regain eligibility for federal student aid. However, the default will remain in your credit history.
- Do not consolidate Parent PLUS loans with other federal student loans. Parent PLUS loans do NOT qualify for all of the income-driven repayment plans and loan forgiveness programs. If you combine other loans with Parent PLUS, you will lose those options for your non-Parent PLUS debt.
Act quickly. The sooner you get out of default, the sooner you can halt consequences like wage garnishment and collections fees, and regain eligibility for federal student aid .
Contact your servicer to discuss your options and find out your next steps.
Questions to ask your servicer about rehabilitation and consolidation
Rehabilitation and consolidation each have pros and cons. Asking your loan servicer these questions can help you decide on the best approach for your circumstances.
About rehabilitation
- What will be my monthly payment?
- When will my first rehabilitation payment be due? When is the soonest I can be finished rehabilitating my loan?
- When will wage garnishment stop?
About consolidation
- Are my loans eligible for consolidation? What is required to make them eligible? (For example, you may need to get your garnishment order lifted.)
- Do I need to make payments before applying for consolidation? Can I reduce my collection fees by making payments?
- What will be my new interest rate and payoff date?
- What is my outstanding interest? (Paying this off before consolidation will help keep your debt from growing.)
- Will I lose any benefits by consolidating? (For example, you may lose progress towards loan forgiveness under PSLF or income-driven repayment.)
About both
- How much will I owe in collection fees? What can I do to avoid or minimize those fees?
- When will I get out of default?
- When will I regain eligibility for federal student aid?
Next, plan ahead to prevent future default
- Consolidating your Parent PLUS loan will make you eligible for the Income-Contingent Repayment (ICR) plan. Stay on track with our tips for managing IDR plans.
- Learn more about the consolidation process .
Find out more
- See tips to pay off your student debt faster
- If you're in the military or work for a government or nonprofit organization, learn about public service loan forgiveness
- Have another type of loan? Review options again for more advice
How should I get started paying off my Parent PLUS loans?
Even if you have experience with other student debt, it’s worth your time learning more about your Parent PLUS loans. It may save you time and money in the long run.
First, learn how they’re different
Parent PLUS loans are costlier and offer less flexibility than federals loans made directly to students. Here are the details:
- The interest rate and origination fee are both higher than student loans.
- If you want to defer payments until after your student graduates, you must contact the servicer. Otherwise, repayment begins 60 days after disbursement.
- Parent PLUS loans are unsubsidized. This means that they will accrue interest during deferment periods. Like all federal student loans, that interest will capitalize (get added to the interest-bearing principal) when deferment ends.
- Out of all the income-driven repayment plans, Parent PLUS loans only qualify for the Income-Contingent Repayment (ICR) plan. Enrolling in ICR requires you to consolidate your Parent PLUS loans.
- Once you’re on ICR, you can pursue Public Service Loan Forgiveness.
Next, choose a repayment plan that fits your needs
- Compare your options using the Education Department’s Loan Simulator . Repayment plan options for Parent PLUS loans include Standard, Graduated, Extended, or Income-Contingent.
- Learn more about ICR and staying on track with income-driven repayment.
- Consider pros and cons before refinancing, and don’t use credit cards or home equity to pay your student loans. Find out more about these and other ways you can avoid scams and wasting money.
Explore other situations
- See tips to pay off your student debt faster
- If you're in the military or work for a government or nonprofit organization, learn about public service loan forgiveness
- Have another type of loan? Review options again for more advice
Can I save time or money paying off my Parent PLUS loans?
Congratulations for staying on track! Let’s check for ways to make it simpler.
First, give your debt strategy a check-up
Here are some options to consider, starting with the easiest and quickest:
- Enroll in direct debit. Your interest rate will be reduced by 0.25% if you have your payment taken directly from your bank account each month.
- If you are chipping away at your debt with extra payments (or “prepayments”), make sure the servicer is applying them to your principal .
- Decide if you want to pursue loan forgiveness through Income-Contingent Repayment (ICR) or Public Service Loan Forgiveness (which requires you to enroll in ICR).
- Use the Education Department’s Loan Simulator to compare your monthly payment and total costs on different repayment plans. It may help to make a budget and learn about strategies for tackling debt first, if you haven’t already.
Next, avoid unnecessary risks
- Consider the consequences before refinancing
- Keep your credit cards and home equity out of your student loans
- Learn why and check out more ways to avoid scams and wasting money
Explore other situations
- See tips to pay off your student debt faster
- If you're in the military or work for a government or nonprofit organization, learn about public service loan forgiveness
- Have another type of loan? Review options again for more advice