Are Parent PLUS loans eligible for PSLF?

Confusion regarding loans is widely known among people. Most often many do not completely understand the difference between a Federal loan and a private loan. To be able to fully understand the difference, you might have to spend some time to know more about the loan types.

Ideally of two kinds- Federal and private loans, they can bring in a lot of advantages and disadvantages.

Some of the most striking differences are being marked below for your better understanding of a private student loan from a Federal loan.

Differences between Federal & private loans	Federal loans	Private loans
Who can take the loan	Only parents	Either parent or student
Do you need a cosigner	If your credit scores are poor as a parent	It may be mandatory for some private loans
Is FAFSA filing compulsory	Yes	No
Lenders for the loan	The Federal government	Private lenders & financial organizations
Repayment options	Standard, extended and graduated	Differs from one lender to another
Disability and death discharge	Disability will be for parents only but death implies to either the student or the parent	It will differ from one lender to another.
Interest rate type	7.54%	It will be decided on the borrower

What is a Parent PLUS Loan?

The Parent PLUS loans are the most reliable resources for a parent who wants to help their children attain their undergraduate degrees. Also, Parent Plus loans offer more flexible repayment options and thus seem more feasible. Mostly, income driven repayment plans work better. During bankruptcy, one cannot easily get rid of the Federal loans.

Parent PLUS loans are forgiven if either the parent or the student dies midway. After the entire payment amount of the loan is disbursed the parents are expected to start repaying them back. But if you want, you can also defer the loan payments after the student graduates from college.

However, most people consider Parent PLUS loans to be a costlier option due to high interest rates in comparison to the private loans with lesser interest option for students.

Are Navient Parent PLUS Loans Federal?	Are Navient Parent PLUS Loans Federal?
Who is the primary borrower?	Parents of the students enrolled in undergraduate courses
Do you need a cosigner?	If parents have an adverse credit history
Should you file FAFSA before a Parent PLUs loan?	Yes
Who is the lender?	Federal government
Interest rate and type	7.54% and is fixed type
Do you need to pay an origination fee?	Yes, you will have to pay an origination fee for every loan
Interest rate reductions for automatic payments of principal and interest	0.25%
Tax deduction on interest	Yes, the facility is available
Is there an option for subsidized interest	Not applicable
Death discharge	It goes to either parent or student
Discharge for disability	Only for parent
Repayment options	Standard, extended or graduated facilities
Period of repayment	Between 10 to 25 years; It depends on the repayment options and loan balance
Availability of cumulative loan limits	No
Loan limit every year	Depends on the cost of attendance without the student aid
Loan fees	4.228%
Are interests tax deductible	Yes, it is available

Are parent PLUS loans eligible for PSLF?

Are Parent Plus loans forgiven under PSLF? The answer to this question is a big yes but only if it is a direct loan, than the Parent PLUS loans are eligible for Public Service Loan Forgiveness (PSLF) affirmatively. Those parents who work for a public service organization or work for a non-profit can get their debts erased under the PSLF scheme.

If you fulfill these below criteria for loan forgiveness, you can demand one for yourself.

1. If you paid for direct loans, you will qualify for PSLF.

2. The next step will be to enroll in a qualifying repayment plan from the two available options. The standard repayment plan and the income-driven repayment plans like IBR, ICR, PAYE, and REPAYE.

3. Ensure you have already made 120 repayments already.

4. Your qualifying employment can be any local, state or Federal government employment and also the non-profit organizations. You will need to submit an employment form for every government position you held from the time your loan began.

FAQs (Frequently Asked Questions)

Can Parent PLUS loans be forgiven under PSLF?

If you are in the government sector and have taken up a Parent PLUS loan to support your children know that only Direct loans can be forgiven under PSLF program. It is one of the easiest ways to ask for loan forgiveness.

Are Parent PLUS loans forgiven after 10 years?

The Parent PLUS loans are forgiven after 120 repayments which means one payment a month will mean 10 years to complete 120 payments.

Are Parent PLUS loans forgiven if the parent dies?

Yes, the Parent PLUS loans are forgiven if the parent dies and that is a plain process underwritten in the loan plan.

Are both parents responsible for Parent PLUS loan?

No, the parents who sign the master promissory note for the Parent PLUS loan will need to pay back the amount and alongwith it, the student themselves are also not responsible to pay back.

Conclusion

If you want to know beforehand about the Parent PLUS loan program, you will just need to understand it better. There is a lot at stake when one needs to take a loan and both types of loans will have their own advantages and disadvantages. The best types of loans are those where one can keep the option for loan forgiveness open.