July 30, 2010
Can I transfer a Parent PLUS Loan?
Many parents, who take out the Parent PLUS Loan, believe they could always transfer the loan to the child, once he or she has graduated and secured a reasonable income. Unfortunately, that is not the case. The PLUS Loan is the responsibility solely of the parent, and is taken out in the parent’s name. He or she is the borrower, not the student.
One option, if finances become an issue for the parent, is to simply have the student reimburse the parent for the cost of the monthly payment, but continue to make the payments in the parent’s name.
If, as a parent, you would prefer a loan that allows you to eventually transfer the repayment obligation, consider a private student loan. These loans are in the student’s name, and depending on the lender, generally have a cosigner release option. After a certain number of consecutive on time payments, the parent (as a co-signer) can apply to be released from the loan, making it entirely the student’s obligation for repayment.
Robert said,
January 21, 2012 at 6:41 PM
Can I claim the interest on my Parent Plus loan? Any restrictions?
edvisors said,
January 23, 2012 at 9:03 AM
You need to check with a tax advisor – it varies by state and by individual.
Eric Klamer said,
November 17, 2011 at 4:38 PM
The majority of my student loans are under my mother as a Parent Plus Loan. She will not ever pay a dime, and this was always understood. I make much more than her, and I make the loan payments to her account. It is great to know she gets my significant interest deductions every year.
Jordan said,
May 29, 2011 at 10:04 PM
Hi, I am trying to understand the Parent Plus loan. Do my parent have to make the payments while I am in college or afterwards? I do not make enough money to take out a loan without a cosigner but my parents and I are at a loss as to which steps to take. The school proposed that they take the PLUS loan but I really dont want them to be stuck with the debt. Is the Plus loan something I should avoid?
Ruth said,
March 24, 2011 at 12:53 PM
As a parent who this happen to i would just like to say that I was misled when I signed up for the loan for my son’s education, I was told after he had been out of school for 2 years that he could take over this loan, and now that is not the case, I only wish i had know at the first and would have taken out some other type of loan
Renee said,
November 26, 2011 at 1:52 AM
This happen to my mother and I as well, it was years ago and my mother is deaf and on social security. It has defaulted for years and now it is so much money I just feel like their is no hope. My school explained it exactly as they did to you.