Parent PLUS Loan Forgiveness: What Are My Options?

The average debt for parent PLUS loan borrowers stands at $29,526, with approximately 3.8 million individuals in repayment, according to the latest federal data. Despite the major role these loans play in college funding, parents are finding themselves excluded from benefits of recent policy changes around student debt relief.

Parent PLUS loan forgiveness is possible, but it can be more complicated than forgiveness for other student loans. Here's how you can find relief.

Do parent PLUS loans qualify for forgiveness?

Parent PLUS loans can qualify for federal student loan forgiveness under two possible programs:

• Public Service Loan Forgiveness: Parents can have their loans forgiven after making 10 years' worth of monthly payments.
• Income-Contingent Repayment: Parents can have their remaining loan balance forgiven after making 25 years' worth of monthly payments.

Related: How Parent PLUS Loans Work

Income-Contingent Repayment (ICR) forgiveness

Once you consolidate your loans into a Direct Consolidation Loan, you can become eligible for forgiveness through an income-driven repayment plan. For parent PLUS loan borrowers, the Income-Contingent Repayment (ICR) plan is your only option.

Under the ICR plan, payments equal the lesser of:

• The amount that would be due on a 12-year repayment plan with a fixed monthly payment, adjusted based on your income, or
• 20% of your discretionary income, divided by 12

Payments on ICR are not capped and in some cases they can be higher than the amount you'd pay on the standard 10-year repayment plan. Keep this in mind, especially if you expect your income to increase in the future, as it may lead to higher loan costs.

The repayment period for the ICR plan is 25 years. After that time, any of your remaining debt is forgiven.

Public Service Loan Forgiveness (PSLF)

Public Service Loan Forgiveness is another forgiveness program available to eligible parents who consolidate their parent PLUS loans. Under the rules of PSLF, parents can get the remainder of their loans discharged after making a total of 120 on-time payments while working full-time at a not-for-profit organization or government job.

When you consolidate PLUS Loans, the rules of PSLF state that only new payments on the Direct Consolidation Loan count toward the required 120 payments.

However, if you consolidate your loans after July 1, 2024, and you were employed in an eligible job prior to the time you consolidated, a weighted average will be used to determine what payments were made on parent PLUS loans eligible for forgiveness.

More relief for parent PLUS loans

If you're a parent PLUS loan borrower struggling to make payments, you have other relief options besides just consolidating:

Deferment or forbearance

Deferment and forbearance result in a pause in payments. Parents may be able to qualify for deferment or forbearance for many reasons, including economic hardship; undergoing cancer treatment; performing qualifying military service; enrolling in a rehabilitation program; unemployment; or experiencing other financial difficulties.

IDR payment count adjustment

The Department of Education is reviewing past payments made by borrowers on income-driven repayment plans to determine if payments not previously counted can count toward forgiveness. Months spent in repayment prior to consolidation may result in an adjustment of your payment count, as can months spent in certain types of deferment or forbearance. This adjustment can result in your loans being forgiven faster.

Bankruptcy discharge

Getting student loans discharged in bankruptcy is difficult but possible. You'll typically need to file a separate action called an "adversary proceeding" and prove that being forced to repay your loan would cause undue hardship.

Other discharges

A parent PLUS loan may be also be fully or partially discharged under the following circumstances:

• Military service: U.S. military service counts toward Public Service Loan Forgiveness. Parent borrowers can potentially be eligible for PSLF if they're serving in the U.S. military, provided they meet the other eligibility requirements.
• Identity theft: If an identity thief has fraudulently taken a parent PLUS loan out in your name, you may be eligible for a discharge of the fraudulent loan.
• Disability: Federal student loans, including parent PLUS loans, may be eligible for a discharge if the borrower becomes permanently and completely disabled.
• Death: If the student for whom you borrowed the student loan dies, your parent PLUS loan may be discharged.
• School closure: If the student for whom you borrowed the loan couldn't complete their studies because the school closed, your parent PLUS loan may be discharged.