Do Parent Plus Loans Qualify For Public Service Loan Forgiveness (PSLF)?

A lot has changed in the past couple of years, most especially in the landscape of student loans. One thing has remained constant, though — the cost of tuition is still steadily increasing and many parents still need to find a way to help pay for it.

Do Parent Plus Loans qualify for Public Service Loan Forgiveness (PSLF)? Let’s get into this, along with what a Parent Plus Loan actually is.

What Is a Parent Plus Loan?

A Parent Plus Loan is a form of federal student loan that allows parents to pay for parts that student loans don’t cover. These are students who are enrolled in an eligible program at least half-time.

The good news about Parent Plus Loans is that in 2020 the interest rate dipped to 5.3%, which is quite significant. The interest rate for the loan is also fixed for the entirety of its lifetime.

Does It Qualify for PSLF?

Yes, a Parent Plus Loan qualifies for Public Service Loan Forgiveness, but things can get a bit complicated. Before we dig in deeper, remember that Parent Plus Loans are not qualified for the limited PSLF waiver.

Please also take note that Parent Plus Loans are not necessarily eligible for income-driven repayment plans. It’s required that these must have debt left to forgive after you’ve made 120 qualifying payments.

Nevertheless, if your Parent Plus Loan was included in the Federal Direct Consolidation Loan and has entered repayment since July of 2006, that consolidation loan will be qualified for ICR (or Income Contingent Repayment). A Parent Plus Loan that was paid by the FDCL will not be qualified for any other income-driven repayment plan.

This paves the way for forgiveness of the Parent Plus Loan through Public Service Loan Forgiveness by means of consolidating ICR and the Parent Plus Loan. Again, 120 qualifying payments must have been made to count towards forgiveness while being paid through the Direct Loan Program while the parent or borrower works a full-time job in public service.

Other Important Considerations

So, what if you do not work a qualified public service job or are retired? Please take note that volunteer work doesn't count, except if it’s for the Peace Corps or AmeriCorps.

When unemployed or retired, a borrower’s payment doesn't count towards PSLF but it will after 20 to 25 years for an income-driven repayment plan. Apart from this, borrowers should strive to pay the loan before they retire.

Final Words

Parent Plus Loans allow you to borrow as much as you need with an interest rate that’s fixed for its lifetime and a few repayment options that might be beneficial for you even if you don’t qualify for Public Service Loan Forgiveness.

For more interesting content about student or federal loans, please browse through our site!

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