RESOURCES
Managing Parent Plus Loans
Managing Parent PLUS loans has always presented challenges due to high interest rates, more expensive repayment plans, and difficulties in qualifying for forgiveness programs.
Overview
Parent PLUS loans are federal loans issued and managed by the U.S. Department of Education. These loans are available to parents of dependent undergraduate students, are unsubsidized, and have a fixed interest rate.
New rules going into effect on July 1, 2026 will restrict Parent Plus borrowers to only one repayment option and will eliminate access to Income-Driven Repayment (IDR) plans and forgiveness programs such as PSLF. Parents planning to take loans on or after July 1, 2026 should understand the full scope of required borrowing and determine ahead of time whether they will be able to make the required payments to service the debt they are incurring.
New Warnings
Parent Plus rules are changing with new loan caps and no access to IDR plans or forgiveness programs. Learn more about the new rules and how grandfathering works for parents with students currently enrolled.
Managing Parent Plus Loans Upon Disbursement
Know Your Student Loan Servicer
If you have a Parent PLUS loan, a designated loan servicer manages your account on behalf of the U.S. Department of Education. You can identify your servicer by logging into your studentaid.gov account. It’s essential to create an account with your servicer and regularly monitor your loans to stay informed about your balance, interest rate, and repayment status.
Choose Between Entering Repayment or Deferment
Parent PLUS loans enter repayment 60 days after disbursement, with interest beginning to accrue immediately. Parents can defer payments while the student is in school, but it’s important to carefully consider whether to start repaying right away or defer, as delaying payments can increase the overall cost of the loan.
Tip:
Paying interest while the student is still in school will help prevent it from capitalizing.
Caution:
Periods spent in school deferment will not count towards forgiveness programs like Public Service Loan Forgiveness (PSLF) or Income Driven Repayment Forgiveness (IDRF).
Understanding Standard Repayment Plans
When federal student loans, including Parent PLUS loans, enter repayment, they are automatically placed in the 10-year standard repayment plan. Under this plan, your payments are calculated based on your loan balance, interest rate, and a 10-year repayment period. While you can stay with this plan, if your balance is more than $30,000 and you don’t take any new loans on or after July 1, 2026, you can switch to an extended 25-year version of this plan. This will reduce your monthly payment, but you will pay more over the life of the loan.
If you take new Parent Plus loans on or after July 1, 2026, you will only have one repayment option: The New Tiered Standard Fixed plan. The repayment period will be based on your loan balance.
Determine Your Debt Tackling Strategy
Eliminating Parent PLUS loan debt requires a tailored approach based on your unique circumstances. Key considerations include your total loan balance, income, age, retirement plans, and eligibility for forgiveness.
Choose 1 of 3 Strategies
- Accelerated Repayment: Paying off the loans as quickly as possible, if feasible.
- Pursuing Forgiveness: Public Service Loan Forgiveness (PSLF) and Income Driven Repayment Forgiveness (IDRF) will only be available to Parent Plus borrowers who have consolidated all their loans before July 1, 2026, and who don’t plan to take additional federal student loan debt on or after that date. Parent Plus borrowers will continue to be eligible for Total and Permanent Disability Discharge if suffering from a chronic physical or mental condition that prevents you from earning a livable wage.
- Minimum Repayment Until Death: Selecting the lowest repayment plan and maintaining it throughout life knowing that federal loans are discharged upon death.
When choosing a strategy, assess affordability, calculate realistic monthly payments, evaluate long-term feasibility, and consider potential income changes in retirement. Your strategy can be revisited and adjusted as needed.
Tip:
Determining your strategy will help you make an informed decision about your repayment plan. Once your strategy is clear, you’ll be able to identify the repayment plan that best aligns with your goals.
Refer to our Repayment Strategies & Plans page to explore your options or use our self-guided tool to determine your strategy.
Understand Your Repayment Plan Options
Traditional Repayment Plans (for borrowers who do not take new loans or consolidate existing loans on or after July 1, 2026)
Standard Repayment Plan (10 years in repayment): Fixed monthly payments calculated to pay off the loan within 10 years. This plan typically results in the lowest total interest paid but requires higher monthly payments.
Graduated Repayment Plan (10 years in repayment): Payments start lower and gradually increase every two years. This plan is ideal for borrowers who expect their income to rise over time.
Extended Repayment Plan (up to 25 years in repayment): Available for borrowers with more than $30,000 in outstanding Direct Loans. Payments can be fixed or graduated, extending the repayment period and lowering monthly payments, but increasing the total interest paid.
Consolidating your loans will limit your repayment option to one Standard Tiered Fixed Repayment plan with a payback period between 10-25 years based on your income. In many instances, it could shorten the repayment term and increase your monthly payment. Review our Repayment Strategies & Plans to learn more about traditional plans.
Income Driven Repayment Plans (for borrowers who do not take new loans or consolidate existing loans on or after July 1, 2026)
Income Contingent Repayment (ICR) (25 years in repayment). Historically, this has been the only Income-Driven Repayment plan available to Parent PLUS borrowers who consolidated their loans. Under new rules, Parent Plus borrowers who have consolidated before July 1, 2026, and do not take additional debt on or after that date, can access the Income Based Repayment (IBR) plan. But first, you must enroll in ICR and make one payment in that plan after which you can transition to IBR and remain in IBR until your debt is eliminated. You must do this before the ICR plan is phased out in July 2028. Payments in IBR are calculated at 10%-15% of Discretionary Income, depending on when your loans were disbursed and are frequently lower than what you would pay in the ICR plan.
Review our Repayment Plan Options section to learn more about IDR plans.
If you are pursuing Public Service Loan Forgiveness (PSLF) or Income Driven Repayment Forgiveness (IDRF), you will be required to pay under the Income Contingent Repayment plan. You will need to consolidate Direct Parent Plus to access ICR. Get help to understand the process.
If you’re married, consider filing your taxes separately to lower your payment in ICR or IBR. Consult an accountant to determine the impact of switching filing status on your taxes.
Caution:
If you consolidate your own student loans and Parent Plus loans together after July 1, 2026, you will only have access to the New Tiered Standard Fixed plan. Seek advice before consolidating.
Here are some reasons why Parent PLUS loans pose significant challenges:
High Interest Rates
Parent PLUS loans typically carry the highest interest rates among all federal student loans, often exceeding 7%. (The interest rate on Parent Plus loans for the academic year 2026-2027 is 9.07%). These rates are fixed over the life of the loan.
Limited Repayment Options
Only parents who are done borrowing and who have consolidated their loans before July 1, 2026, will have access to payment plans based on income going forward. New borrowers or those who consolidate on or after July 1, 2026, must pay loans back in the Standard Tiered Fixed Repayment plan which offers no forgiveness. Parents need to be very strategic about borrowing for their children’s higher education. Understand how much you will need to borrow for your child to complete their entire schooling, not just the first year and determine whether you can afford to pay the loans back under the terms of the new repayment plan.
If you currently have student loans and will continue to have access Income-Driven Repayment, use our Repayment Plan Calculator to determine your monthly payment.
If you are just getting started, use the EDCAP College Cost Comparison Tool to calculate what your will need to borrow in the first year and the College Borrowing and Repayment Planner to map out your long-term debt and repayment costs.
Some Parent Plus Loans Are Still Eligible for PSLF
Things to Know About PSLF and Parent Plus Loans
Consolidation Required: Parent PLUS loans must be consolidated fully consolidated into a Direct Consolidation Loan before July 1, 2026 to qualify.
ICR Plan: After consolidation, you must make one payment in the Income Contingent Repayment (ICR) plan after which you can switch to the Income Based Repayment (IBR) plan (if that is cheaper) for the remainder of the life of the loan. Payments in both ICR and IBR are eligible for PSLF. You must make the payment in ICR before the plan is phased out in July 2028. We recommend doing this as soon as possible. If you are in the ICR plan at the time it is phased out in July 2028 and you still need to make additional payments for PSLF, you will be automatically switched to IBR.
120 Payments: You need to make 120 qualifying payments under the ICR or IBR plan while working full-time for a qualifying employer (government or non-profit).
Forgiveness: After 120 payments, any remaining balance is forgiven tax-free. You must submit a PSLF application and Employment Certification Forms (ECFs) to track your progress. You can use the PSLF Help Tool to submit the form. Request an electronic signature from your employer for the fastest update. You can track your progress via studentaid.gov.
Married Borrowers: You may be able to reduce your ICR or IBR payment if you are married and filed separately. You must assess the pros and cons of filing separately.
Documentation: Keep detailed records and submit annual Employment Certification Forms to track progress and verify eligibility.
Federal Parent Plus Loans vs. Private Loans
Understand the Pros & Cons of Both
Though Parent Plus loans have always been more challenging to pay back, new borrowers starting July 1, 2026, will be more severely limited in terms of repayment options than at any time in the past. With no access to Income Driven Repayment (IDR) plans or forgiveness programs like PSLF, the difference between a Parent Plus loan and a private loan has narrowed.
Despite these new limitations, federal debt may still offer:
- Lower interest rates at the time the loans are obtained.
- More options to defer or forbear payments.
- Access to disability discharge, which can be much harder to get with a private loan.
- Discharge in death so that the obligation does not pass to your estate or your loved ones.
In some circumstances, future Parent Plus borrowers may opt for private loans:
- You may be able to refinance to a lower interest rate when market conditions allow.
- If you have accumulated federal Parent Plus loans and are pursuing PSLF or IDRF but you need to continue borrowing so your child can complete their education, consider a private loan so that you preserve your access to IDR plans and forgiveness on the existing debt.
