Parent Plus Loans Case Study

4 Secret solutions to finally getting those Parent Plus loans under control

I’m sure you have seen thousands of articles on student loan debt and how students cannot afford to pay back college debt.

We seem to have all forgotten about their amazing parents that also took on a huge burden and getting stuck with Parent Plus loans when there children were getting there undergraduate degrees.

The news is even worse for the parent plus loans. The current debt on parent plus loans is a whopping $78 billion. To make things even tougher on the parents, the parent plus loans have some of the highest interest rates of any student loan. The average interest rate for parent plus loans is 7.0% and even higher for older parent plus loans.

This is all

tough news to take in but there are solutions to the problem. Below are four solutions that you can truly take advantage of. As you will see it all depends on your situation. So read carefully below on what makes the most sense for you and take action.

Public Service Loan Forgiveness (PSLF)

Pros:Parent PLUS student loans can be forgiven after 10 years.

Cons: Limited to public service workers.

How to qualify for the Public Service Loan Forgiveness (PSLF) is to be employed by certain public service job, such as those in government and nonprofits fields. This federal program forgives all student loan debt after 120 qualifying payments.

Graduates tend to take advantage of this program through Income Driven repayment plans. You will need to keep in mind that most of these plans aren’t available for Parent PLUS loans. More than likely you will need to consolidate your loan with the federal government by using Income-Contingent Repayment.

Before you decide to apply for PSLF, make sure you qualify. The rules that apply to other federal student loans usually apply to Parent PLUS loans as well as other programs.

Make sure that your strategy with taking advantage to any loan forgiveness program is the smart one. Once you are done with you repayment plan it's possible that you will have little to no debt to be forgiven for. If you are paying for extra interest this might do more harm than good.

2. Income-Contingent Parent PLUS Loan repayment

plan
Pros: Offers lower monthly payments and Parent PLUS Loan forgiveness after 25 years.
Cons:Higher interest charges out of your income than other income-driven repayment plans.
There are four different types of income-driven repayment plans that the federal government offers, with Parent PLUS loans you are only eligible for one: Income-Contingent Repayment. Income Contingent Repayment puts you on a monthly student loan payment at 20 percent of your income. Monthly payments can be as low as 0$
With is plan can be helpful because it is lower than other options. So you can have extra money in your pocket.
3.

Parent PLUS Loan consolidation and refinancing

Pros: Could lower your interest rates on Parent PLUS Loans.

Cons: Requires a credit check and an income check. You could lose the flexibility that you have been provided by the federal government.

Refinancing with the Parent PLUS Loan can work especially well for some borrowers. Typically graduates have established credit than graduates in their 20s . If you are a parent with a higher credit score then you have a better chance to be approved for student loan refinancing

People who have Private student loans will not have the same repayment options that federal student loans do.If you have a Private student loan you may not be able to change your repayment plan as federal student loans do. Once you decide to refinance your only other option would be to refinance again. You need to make sure this is the right choice for you because you are giving up some of the federal protections. In order to protect your retirement fund, parents nowadays are deciding to refinance.

You can decide to refinance your loan in your child's name . With this option, your child will take over your payment. It can take the pressure off you, especially if your payments have been to high and you have been

struggling.

4. Standard Parent PLUS Loan repayment
Pros: For over 10 years it will keep your cost low.
Cons: Could possibly have higher monthly payments.

With the Standard Repayment Plan, if you have already started paying for your Parent PLUS Loan you are currently enrolled in this plan . There are not many thing wrong with this plan if you can afford the payments. The problems with standard Parent PLUS loan repayment only come around if you cannot afford to make your payments. If you cannot afford this option, you should think about choosing another option instead of risking default.
There are other options available like the Graduated repayment plan. The only thing with this plan is the interest rates are high.
If you need extra help with student loans and more facts to get into the best program, feel free to call our affiliates that help with these services at 866 978 3023.