Parent PLUS Loan Borrowers Can Be Eligible for Forgiveness

While there are multiple ways to save for a college fund, the rising cost of education means savings are no longer enough for many families to cover college expenses. As a result, households are turning to education loans. As a parent, you can take out a student loan on behalf of your child. It’s called the Parent PLUS Loan. Are Parent PLUS Loans eligible for PSLF (Public Service Loan Forgiveness)?

While taking out an education loan may be the only option to get your child to college, repaying the debt can be a serious challenge if you have a low income. The good news is that if you work in public service, you might be able to access student debt relief. The PSLF program provides a path for people who accept usually low-paying jobs in the government or nonprofits to be discharged from some of their education debts.

In the Parent PLUS Loan, the parent borrower is the one responsible for the debt, not the benefiting student. You get the loan for your biological or adopted child. How much you can borrow depends on the college cost. The loan is usually subject to a fixed interest rate. As part of the application screening, a credit score check will be conducted on you.

If you work in public service and are struggling with student loans taken out for your child, you may wonder whether you can get relief through the PSLF program. Parent PLUS Loans aren’t directly eligible for the PSLF program. However, there are a few steps you can take to access the relief.

The PSLF program eliminates your student loan after you’ve worked in public service for at least 10 years. Another condition is that you must have made at least 120 monthly payments toward reducing the loan. The program drops whatever balance remains in your student debt after your public service years.

You need to apply for relief while you’re still working in public service. To make a Parent PLUS Loan eligible for the PSLF, you need to convert it into a Direct Consolidation Loan. Student loan consolidation is designed to make the debt eligible for an income-driven repayment plan, which is necessary to get into the PSLF program.

If you don't do the direct student loan consolidation, the previous payments won't count toward the required 120 monthly payments threshold. Your public service job before the consolidation doesn’t count either. If you’re interested in the public service student loan relief, then you need to do the consolidation as soon as possible.

A full-time public service job is a must if you want to access the PSLF program. In fact, you can’t access the relief if you worked in public service for many decades and are now retired. However, there are other relief avenues Parent PLUS Loan borrowers can pursue.

For example, you may be discharged from the debt if you become permanently disabled. The debt may also be dropped if the child for whom you took the education loan dies. If your eligibility for the loan was falsified through identity theft and you turned out to be a victim, you may also be discharged from the Parent PLUS Loan.