Student-centric advice and objective recommendations
Higher education has never been more confusing or expensive. Our goal is to help you navigate the very big decisions related to higher ed with objective information and expert advice. Each piece of content on the site is original, based on extensive research, and reviewed by multiple editors, including a subject matter expert. This ensures that all of our content is up-to-date, useful, accurate, and thorough.
Our reviews and recommendations are based on extensive research, testing, and feedback. We may receive commission from links on our website, but that doesn’t affect our editors’ opinions. Our marketing partners don’t review, approve or endorse our editorial content. It’s accurate to the best of our knowledge when posted. You can find a complete list of our partners here.
How to Transfer a Parent PLUS Loan to a Student
Are you wondering how to transfer your Parent PLUS Loan to a student? There are a variety of reasons why a parent who borrowed a PLUS loan for their child may want to transfer the debt to them. It is possible to do this, but not through a federal program. To put the debt in the student’s name, the loan must be refinanced through a private company. Continue reading to learn more about how to transfer your parent loan to a student!
What are Parent PLUS loans?
Parent PLUS loans are offered by the Department of Education. They are loans that are taken out by a parent to help pay for their child’s education. Only the biological or adoptive parents of a student can take out a PLUS loan for them. PLUS loans are taken out in the parent’s name, therefore the parent is responsible for repayment of the debt.
Parents can take out a PLUS loan for up to the school’s cost of attendance.
Also see: Parent PLUS Loans: Pros and Cons
PLUS loans technically can’t be transferred
There is no federal program that allows PLUS loans to be transferred from a parent to the student. When a parent takes out a PLUS loan for a student, they are legally responsible for the debt.
Refinance Parent PLUS loans
Though a PLUS loan can’t be transferred to a student as a federal loan, there are private lenders that will allow a PLUS loan to be refinanced in the student’s name. For example, SoFi allows parent PLUS loans to be refinanced in the student’s name. Each private lender has its own rules regarding refinancing PLUS loans. Be sure to do your research to confirm that it can be done.
For the student to take out a refinanced loan, they’ll have to meet the requirements of the lender. One of these requirements will be a high credit score. If a student doesn’t meet the requirements, the parent could cosign the loan to help the student become eligible. As a cosigner, the parent’s name will still be associated with the loan, and their credit could be impacted if the student fails to make payments.
See also: How do student loans affect credit?
Things to consider
Parent PLUS loans have high interest rates; the interest rate is 6.28% for the 2021-2022 year. Refinancing could earn the student or the parent a lower interest rate, which could save money over time.
However, before refinancing your PLUS loan, consider the benefits you may lose. When a federal loan is refinanced into a private loan, the borrower will lose access to federal programs. This includes Public Service Loan Forgiveness, generous deferment and forbearance, and graduated and extended repayment plans.
See also: How to get your student loans deferred
Refinancing a parent PLUS loan in the student’s name can free up funds for the parents. Be sure to also consider the student’s financial situation before doing so!