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If you took out federal student loans to help your child pay for college, you might want to transfer those Parent PLUS Loans to your student after they graduate. While your child can always help you make payments, there’s no way to transfer Parent PLUS Loans directly into their name.
Even though federal student loans can’t be transferred, there’s another way your child can take over those loans: By refinancing student loans into a private loan that’s in their name — which could even get them a lower interest rate.
Here’s what you should know about transferring Parent PLUS Loans:
- Transfer Parent PLUS Loans to the student by refinancing
- What to consider before transferring Parent PLUS Loans
- Paying back your Parent PLUS Loans
- Parent PLUS Loan alternatives
Transfer Parent PLUS Loans to the student by refinancing
In order to refinance Parent PLUS Loans, your child will need a:
- History of earnings
- Good credit score (typically 670 or higher)
- Good debt-to-income ratio (typically under 50%)
- Bachelor’s degree (not all require this, but most do)
It could take your child a little while after graduating to build the credit history and income needed to qualify for refinancing. But many lenders will let borrowers apply with a cosigner, which could be you, another relative, a spouse, or a friend.
While many lenders offer student loan refinancing, not all of them will refinance Parent PLUS Loans into a child’s name. The table below shows which lenders refinance Parent PLUS Loans, including several who allow children to transfer Parent PLUS Loans into their own name when refinancing.
|Lender||Variable rates from (APR)||Fixed rates from (APR)||Can transfer into child's name?|
After obtaining rates from private lenders, you can use a student loan refinancing calculator to compare how much you or your child might save by refinancing Parent PLUS Loans.
Step 1. Enter your loan balance
Step 2. Enter current loan information
Step 3. Enter your new loan information to start calculating your savings
If you refinance your student loan at % interest rate, you can save will pay an additional $ monthly and pay off your loan by . The total cost of the new loan will be $.
Does refinancing make sense for you?
Compare offers from top refinancing lenders to determine your actual savings.
Checking rates won’t affect your credit score.
What to consider before transferring Parent PLUS Loans
- Your child will be responsible for the loans: Once your child has refinanced your Parent PLUS Loans into their own name, it’s their responsibility to repay them. Because they’ve converted your federal loan into a private loan, they won’t have access to federal benefits like income-driven repayment with the potential to qualify for loan forgiveness after 10, 20, or 25 years of payments.
- You might qualify for Public Service Loan Forgiveness (PSLF): If you work for the government or a qualified nonprofit, you could qualify for PSLF after 10 years of payments. If you think you might qualify for Public Service Loan Forgiveness, use the Department of Education’s repayment estimator to see what your monthly payment and total repayment costs would be before transferring your PLUS loans to your children.
Paying back your Parent PLUS Loans
When paying back PLUS Loans, there are a couple of things to remember, especially if you’re having trouble making payments:
- You can request a deferment: If your child isn’t ready to refinance and you’re having trouble making the monthly payments, you can request to defer payments while your child is in school. Then, you can choose a repayment plan that minimizes your monthly payments until your child is ready to take over your PLUS loans. Just remember that when you postpone or reduce your monthly payments, you’re typically extending your loan term, which means you’re likely to pay more in interest.
- You can be eligible for ICR: Parent PLUS Loans aren’t eligible for most income-driven repayment plans, but you can combine them in a federal Direct Consolidation Loan and then repay the new consolidation loan under an Income Contingent Repayment (ICR) plan.
Parent PLUS Loan alternatives
Rates on federal Parent PLUS Loans are so high that many families opt for parent student loans from private lenders instead. Credible makes it easy to compare private student loan rates, so you can find the right loan for you (plus, it doesn’t affect your credit).
If you’re still trying to decide, here’s what you need to know when it comes to Parent PLUS Loans vs. Private Student Loans.