July 30, 2010

Can I transfer a Parent PLUS Loan?

Posted in Parent PLUS Loans, Private Loans, Student Loan News tagged , , at 2:10 PM by plusloans


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.

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8 Comments »

  1. Frank said,

    For future parents and students- do not use the Parent PLUS loan. It is a scam, designed by the government and endorsed by the government.

    Get a private loan instead. Even if the interest is higher to begin with, the flexibility and stability are worth it.

    I’ve just graduated from college, and my parents have 100s of thousands of dollars of debt in their name. The interest rate is exorbitantly high, guaranteed to be more than any private loan. Even worse, my father will simply not be able to retire peacefully because he cannot transfer this debt to his son- me.

    Do not by any means go with a Parent PLUS loan- do a private loan instead, no matter how much money you require.

  2. Robert said,

    Can I claim the interest on my Parent Plus loan? Any restrictions?

    • edvisors said,

      You need to check with a tax advisor – it varies by state and by individual.

  3. Eric Klamer said,

    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.

  4. Jordan said,

    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?

  5. Ruth said,

    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,

      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.

    • Chaz said,

      This has also happened to us. They duped us


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