People also ask
Do parents have to pay back Parent PLUS loans?
And very often, they are left making those loan payments long after their student graduates, sometimes still owing money well into their retirement years. But it鈥檚 not always the parent who pays back the parent PLUS loan 鈥?the student can pitch in with repayment, or even refinance the loans into their own name.
How does Parent PLUS refinancing work?
Through Parent PLUS refinancing, existing parent student loans may be able to be consolidated and refinanced into one new loan, ideally at a lower interest rate. A better rate might allow you to pay less interest over the life of the loan鈥攁nd if you also shorten your loan term, you can potentially get the loan paid off more quickly.
How does a Parent PLUS loan transfer to a student?
In effect, this transfers the Parent PLUS Loan into the student鈥檚 name, but it involves a new loan with new terms and conditions. The student is then responsible for repayment of the new loan and the proceeds from the new loan pay off the Parent PLUS Loan. If a child is willing and financially able, this can greatly reduce the parents鈥?debt burden.
Can a child take out a refinanced loan to pay off PLUS loans?
And while there are a few private lenders that will allow a child to take out a refinanced loan to pay off their parent鈥檚 PLUS Loan, it鈥檚 not technically a transfer. Let鈥檚 get into it. From a student鈥檚 perspective, a Parent PLUS Loan can be a great way to help get their education funded without taking on more debt.