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Can I Refinance My Parent PLUS Loan?

Parent PLUS loans are federal student loans that parents can take out to help pay for their children’s undergraduate education. These loans can fill in gaps that aren’t covered by other types of financial aid.

If you took out a Parent PLUS loan for your child, you may be wondering if you can refinance it. The short answer is yes, you can refinance your Parent PLUS loan. Doing so could reduce your interest rate or monthly payments, or help you transfer your PLUS loan into your child’s name. 

In this article, we’ll explain the different PLUS loan refinancing options and when refinancing could be a good idea.

What Are the Best Parent PLUS Loan Refinance Options?

Refinancing is the process of replacing your current loan with a new loan that has different terms. If you want to refinance your PLUS loan, you have several options to choose from:

  • Private student loan refinancing – The first way to refinance your PLUS loan is to go through a private lender. Refinancing your PLUS loan into a private student loan may lower your interest rate if you have a high credit score. This is also the only refinancing method that can help you transfer your debt into your child’s name. Just keep in mind that you will lose your federal loan benefits and protections by refinancing to a private student loan.
  • Federal student loan consolidation – Loan consolidation allows you to bundle several loans into a new loan. Federal Direct Student Loan Consolidation can only be used with federal student loans. Direct PLUS Loans received by parents to help pay for a dependent student’s education cannot be consolidated together with federal student loans that the student received. After you consolidate your debt, you’ll only have to make one payment per month. You may also be able to extend your repayment period up to 10 to 30 years. Your new interest rate will be the weighted average of your old ones.
  • Income-contingent repayment – PLUS loans are eligible for several student loan repayment options, including the Income-Contingent Repayment (ICR) plan. Like all income-driven repayment plans, your monthly student loan payments are adjusted to better suit your budget based on your income and family size. Your ICR payments will be the lesser of the following two options: (1) 20% of your discretionary income divided by 12 or (2) the amount you’d pay if you enrolled in a 12-year, fixed-payment plan adjusted to your income. If you enroll in an ICR plan, your loan term will be reset to 25 years. After that time, your remaining PLUS loan balance will be forgiven. 


Is Refinancing or Consolidating PLUS Loans a Good Idea?

So, should you refinance your PLUS loan? It ultimately depends on your goals, priorities, and eligibility status. Here are some potential benefits you can receive from refinancing your PLUS loan: 

  • Lower interest rate – Parent PLUS loans have some of the highest interest rates of all student loans. In contrast, private refinanced student loans can have relatively low interest rates. Refinancing with a private lender could help you save money on interest if you qualify.
  • Lower monthly payments – A PLUS loan can place a burden on your budget if your payments are too high. Refinancing can decrease your monthly payment amount if you receive a lower interest rate, a longer loan term, or both.
  • Possibility to transfer the debt to your child – Many parents take out PLUS loans under the assumption that their children will take over the payments after graduation. The only way to transfer your PLUS loan debt into your child’s name is to refinance it with a private lender.

The benefits of loan consolidation are as follows:

  • One monthly payment – If you have multiple federal student loans, federal loan consolidation can help you bundle them into one. Managing one loan payment is a lot easier than juggling multiple monthly payments.
  • Student loan forgiveness eligibility – Another advantage of consolidating your PLUS loans into a Direct Consolidation Loan is that it can allow you to take advantage of loan forgiveness through the Public Service Loan Forgiveness (PSLF) program or the ICR plan. 


What Do I Need to Do to Refinance My Parent PLUS Loans?

Each refinancing method has different eligibility requirements. To qualify for refinancing with a private lender, you’ll typically need a credit score of 650 or above, stable employment history, and a low debt-to-income (DTI) ratio.

If you don’t possess these qualifications yourself, you can boost your chances of getting approved by applying with a cosigner with superior creditworthiness. You may also have an easier time securing a competitive rate if you apply with a local credit union. If you’re not already a member, we can help you can find a credit union.

During the refinancing application process, you’ll need to provide your:

  • Driver’s license or passport
  • Proof of U.S. citizenship 
  • Proof of employment and income
  • 30-day payoff statement from your PLUS loan servicer

Federal Student Loan Consolidation Eligibility Requirements

If you prefer to consolidate your PLUS loan, you don’t need to worry about meeting any credit score requirements. Instead, you just need to wait until your child has graduated, left school, or dropped below half-time enrollment.

You can consolidate your federal student loans by filling out the Federal Direct Consolidation Loan Application on You’ll be asked to provide your FSA ID, as well as some personal and financial information. 

Income-Driven Repayment Eligibility Requirements

You can only enroll in the ICR income-driven repayment plan if you’ve consolidated your PLUS loan into a Direct Consolidation Loan first. After that, you can request to enroll in the ICR plan. Keep in mind that you’ll need to recertify your income every year to stay enrolled. 

Learn More About Refi Options for PLUS Loans

As you can see, there are many ways to refinance your Parent PLUS loan. Learn more about how we can help with your student loan refinancing needs.

*Federal student loans may qualify for payment and interest rate benefits that private student loans do not. Carefully consider your options before refinancing federal student loans, as they will no longer qualify for current and future federal benefits once refinanced with a private lender. For more information, visit or contact your federal student loan servicer.