Transferring Parent PLUS Loans to Student Through Refinancing

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If you took out federal Parent PLUS Loans, you might wonder if it’s possible to transfer those loans into your child’s name once they’re finished with school.

Unfortunately, there’s no way to transfer a PLUS Loan directly to your child — but you might be able to refinance the loans in your child’s name with certain lenders.

Here’s what you should know about refinancing Parent PLUS Loans in a student’s name:

• Should you refinance your Parent PLUS Loan in your child’s name?
• Lenders that refinance Parent PLUS Loans
• How to refinance Parent PLUS loans in the student’s name
• How to refinance in the parent’s name
• What if my child isn’t ready to qualify for a student loan refinance?
• Frequently asked questions about Parent PLUS Loans

Should you refinance your Parent PLUS Loan in your child’s name?

Refinancing a Parent PLUS Loan in a student’s name could be a good choice in some cases, but it isn’t right for everyone.

If you’re thinking about refinancing your student loan, here are a few pros and cons to keep in mind:

Pros

• No longer responsible for the loan: Because the loan will be in your child’s name, you’ll no longer be responsible for making payments. This could help lessen the strain of payments on your budget.
• Could help student build their credit: Your child’s credit could benefit from having the loan in their name — for example, by making on-time payments.
• Might get a better interest rate: PLUS Loans come with higher interest rates compared to other federal loans. Depending on their credit, your child might qualify for a lower interest rate through refinancing — which could save them money on interest and even help them pay off the student loan faster.

Learn More: When to Refinance Student Loans

Cons

• Loss of federal benefits: While you can refinance both federal and private loans, refinancing a federal student loan — such as a Parent PLUS Loan — will cost you access to federal benefits and protections. For example, you’ll no longer be eligible for income-driven repayment plans or student loan forgiveness programs.
• Might be hard for student to qualify: Borrowers typically need good to excellent credit to qualify for refinancing — a good credit score is usually considered to be 700 or higher. If your child has poor or no credit, it could be difficult for them to get approved.
• Lack of repayment options: Private refinanced loans don’t offer the variety of repayment options that federal student loans do — such as income-driven or extended repayment plans.

Check Out: Private Student Loan Forgiveness Alternatives

Lenders that refinance Parent PLUS Loans

If you decide to refinance your Parent PLUS Loans, it’s important to consider as many lenders as possible first. This way, you and your student can find the right loan for your situation.

Here are Credible’s partner lenders that allow Parent PLUS Loans to be refinanced into a student’s name:

Lender	Fixed rates from (APR)	Variable rates from (APR)	Loan terms (years)	Loan amounts
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology. View details	2.94%+	N/A	10, 15, 20	$7,500 up to $500,000 (larger balances require special approval)
Fixed APR: 2.94%+ Variable APR: N/A Min. credit score: Does not disclose Loan amount: $7,500 up to $500,000 Loan terms (years): 10, 15, 20 Max. undergraduate loan balance: $250,000 - $500,000 Time to fund: 4 days Repayment options: Immediate repayment, forbearance, loans discharged upon death or disability Fees: None Discounts: Autopay Eligibility: Must be a U.S. citizen or noncitizen with proof of residency card, have an acceptable income and credit history or an approved cosigner, and have entered grace or repayment on the loans he or she wants to refinance Customer service: Phone Soft credit check: Yes Cosigner release: After 12 months Loan servicer: Kentucky Higher Education Student Loan Corporation Max. graduate loan balance: $250,000 - $500,000 Credible Review: Advantage Education Loan review Offers Parent PLUS Refinancing : Yes
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology. View details	4.49%+1	3.84%+1	5, 7, 10, 15, 20	$10,000 to $500,000 (depending on degree and loan type)
Fixed APR: 4.49%+1 Variable APR: 3.84%+1 Min. credit score: Does not disclose Loan amount: $10,000 to $750,000 Loan terms (years): 5, 7, 10, 15, 20 Repayment options: Immediate repayment, academic deferment, military deferment, forbearance, loans discharged upon death or disability Fees: Late fee Discounts: Autopay, loyalty Eligibility: Must be a U.S. citizen or permanent resident and have at least $10,000 in student loans Customer service: Email, phone, chat Soft credit check: Yes Cosigner release: After 24 to 36 months Loan servicer: Firstmark Services Max. Undergraduate Loan Balance: $100,000 to $149,000 Max. Graduate Loan Balance: Less than $150,000 Offers Parent PLUS Refinancing: Yes
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology. View details	5.49%+	N/A	5, 8, 12, 15	$7,500 to $300,000
Fixed APR: 5.49%+ Variable APR: N/A Min. credit score: 670 Loan amount: $7,500 to $300,000 Loan terms (years): 5, 8, 12, 15 Repayment options: Does not disclose Fees: None Discounts: None Eligibility: Must be a U.S. citizen and have and at least $7,500 in student loans Customer service: Email, phone, chat Soft credit check: Yes Cosigner release: After 12 months Loan servicer: PenFed Max. Undergraduate Loan Balance: $300,000 Max. Graduate Loan Balance: $300,000 Offers Parent PLUS Refinancing: Yes
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology. View details	4.29%+	N/A	5, 10, 15	$7,500 up to $250,000 (depending on highest degree earned)
Fixed APR: 4.29%+ Variable APR: N/A Min. credit score: 680 Loan amount: $7,500 to $250,000 Loan terms (years): 5, 10, 15 Repayment options: Academic deferment, military deferment, forbearance, loans discharged upon death or disability Fees: None Discounts: Autopay Eligibility: Available in all 50 states; must also have at least $7,500 in student loans and a minimum income of $40,000 Customer service: Email, phone Soft credit check: Does not disclose Cosigner release: No Loan servicer: Rhode Island Student Loan Authority Max. Undergraduate Loan Balance: $150,000 - $249,000 Max. Graduate Loan Balance: $200,000 - $249,000 Offers Parent PLUS Refinancing: Yes
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All APRs reflect autopay and loyalty discounts where available | 1Citizens Disclosures | 2College Ave Disclosures | 5EDvestinU Disclosures | 3 ELFI Disclosures | 4INvestEd Disclosures | 7ISL Education Lending Disclosures

Learn More: How Often Can You Refinance Student Loans?

How to refinance Parent PLUS loans in the student’s name

If you’re ready to refinance Parent PLUs Loans into your child’s name, follow these four steps:

1. Research and compare lenders. Be sure to shop around and compare as many student loan refinance companies as you can to find the right loan for you. Consider not only interest rates but also repayment terms, any fees charged by the lender, and eligibility requirements.
2. Pick a loan option. After you’ve done your research, choose the loan option that best suits the needs of you and your child.
3. Complete the application. Once you’ve picked a lender, you and your child will need to fill out a full application and submit any required documentation, such as tax returns or pay stubs.
4. Manage payments. If your child is approved, keep in mind that it could take one or two billing cycles for the refinance to be processed. While you’re waiting, continue making payments on your PLUS Loan. Afterward, the student could consider signing up for autopay so they won’t miss any payments in the future — many lenders offer a rate discount to borrowers who opt for automatic payments.

Depending on their credit, your child might qualify for a lower interest rate on a private refinanced loan. This could save them money on interest charges and even help them pay off the loan more quickly.

You can use our calculator below to see how much you might save by refinancing your student loans.

Check Out: Student Loan Repayment Calculator: Estimate Your Payoff Date

How to refinance in the parent’s name

If refinancing into your child’s name doesn’t suit your needs, you could refinance the PLUS Loan while keeping it in your name. While you’ll still be responsible for the loan, you might save money on interest if you can get a lower interest rate through refinancing.

Or you could opt to extend your repayment term to reduce your monthly payments and lessen the strain on your budget. Just keep in mind that this means you’ll pay more in interest over time.

Learn More: Debt-to-Income Ratio for Refinancing Student Loans

What if my child isn’t ready to qualify for a student loan refinance?

If your child hasn’t had a chance to build a solid credit history yet, it might be difficult for them to qualify for refinancing on their own. Here are a few options to consider in this situation:

Your child could help make payments

Even if the loan isn’t in your child’s name, they can still make payments on the loan. This could be a good way for them to get in the habit of paying the loan each month if they end up taking over the loan in the future.

In the meantime, they can work to build their credit so they can qualify for refinancing later — for example, by making on-time payments on all of their bills, paying down credit card balances, or becoming an authorized user on the credit card account of someone they trust.

Check Out: How Long It Takes to Pay Off Student Loans

You could cosign the loan

If your child is struggling to get approved for refinancing, you could consider cosigning the loan. Having you as a cosigner might even qualify them for a lower interest than they’d get on their own.

While this means you’ll continue sharing responsibility for the loan, keep in mind that several lenders offer a cosigner release option — to be eligible for cosigner release, your child will typically need to make consecutive, on-time payments for a specific period of time as well as meet the underwriting criteria on their own.

Check Out: Refinance Student Loans With a Cosigner in 3 Steps

Frequently asked questions about Parent PLUS Loans

Here are the answers to a few commonly asked questions regarding Parent PLUS Loans:

Who is responsible for Parent PLUS Loans in a divorce?

Generally, only one parent can sign the Master Promissory note for a Parent PLUS Loan. This means that only the parent who took out the PLUS Loan is responsible for it in case of divorce — not the other parent or the student who benefitted from the loan.

Learn More: Federal Student Loans and COVID-19: What You Need to Know

What if you can’t afford the monthly repayment amount?

If you can’t afford your monthly payments on a Parent PLUS Loan, here are several options to consider:

• Request deferment or forbearance. You might qualify for federal deferment or forbearance in cases of financial hardship — both of these options are a way to temporarily pause your student loan payments. Keep in mind that interest will continue to accrue on PLUS Loans during deferment and forbearance periods.
• Sign up for an income-driven repayment plan. On an income-driven repayment (IDR) plan, your payments will be based on your income. Parent PLUS Loans are only eligible for the Income-Contingent Repayment (ICR) plan — though you’ll need to consolidate your loan into a Direct Consolidation Loan first. If you sign up for ICR, your payments will be limited to 20% of your discretionary income (or what you’d pay on a 12-year, income-adjusted plan). Any remaining balance could be forgiven after 25 years.
• Consolidate your loan. If you consolidate your student loan into a federal Direct Consolidation Loan, you can extend your repayment term up to 30 years, which could significantly reduce your payments. Keep in mind that federal consolidation comes with its own pros and cons — for example, while you could get a lower payment, you’ll pay more in interest with a longer repayment term.
• Refinance the loan into your child’s name. With some lenders, you can refinance a Parent PLUS Loan into your child’s name — which means you’ll no longer need to make the payments.
• Refinance the loan in your name. If your child doesn’t qualify for refinancing, you could refinance the loan in your own name instead. Depending on your credit, you might get a better interest rate through refinancing. Or you could pick a longer repayment term to lower your monthly student loan payments to a more affordable amount — though remember that this means you’ll pay more in interest over the life of the loan.

Check Out: Student Loan Consolidation vs. Student Loan Refinancing

Are Parent PLUS Loans forgiven when you retire?

No, Parent PLUS Loans don’t qualify for forgiveness when you retire. However, Parent PLUS Loans are eligible for some student loan forgiveness programs.

If you decide to refinance your Parent PLUS Loans, remember to consider as many lenders as possible to find the right loan for your needs.

Credible makes this easy: You can compare your prequalified rates from multiple lenders in two minutes — without affecting your credit score.

Keep Reading: Private Student Loan Consolidation

About the author

Angela Brown

Angela Brown is a student loan, personal finance, and real estate authority and a contributor to Credible. Her work has appeared in Fox Business, LendingTree, FinanceBuzz, and Yahoo Finance.

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