Learn how parents can get student loan forgiveness.
Here’s what you need to know.
In the ongoing search for student loan forgiveness, parents may wonder if they too can obtain student loan forgiveness. The good news is yes. However, parents who have student loans must take several steps to have their student loans forgiven. This is what you must do.
(No, Biden didn’t promise to call in your student loans).
How to Get Student Loan Forgiveness
As with most student loan forgiveness options, parents with state student loans may qualify for student loan cancellation. Specifically, parents who, for example, have borrowed a Parent PLUS loan for their dependent child to attend college have several options for obtaining student loan forgiveness. This contains:
- forgiveness of public service loans; and
- income-related repayment
Civil Service Loan Forgiveness: How to Cancel Parent PLUS Loans
Is there a student loan waiver for Parent PLUS loans?
Yes, there is a student loan waiver for Parent PLUS loans. For example, government loan forgiveness is an option. (Do you qualify for $5 billion student loan forgiveness?) Parents with Parent PLUS loans may qualify for the government loan forgiveness program. Under this program, student borrowers must be working full-time for a qualified government service or non-profit employer. When it comes to government loan forgiveness, your role doesn’t matter. Rather, it is your employer. Working for the federal government might qualify. However, working at a consulting firm where you work with the federal government wouldn’t count. (Biden has stopped questioning student loan forgiveness after public outcry).
How to sign up
You want to sign up for an income-based repayment plan. These plans set your monthly payment based on your discretionary income and family size. There are four income-contingent repayment plans, including Income-Contingent Repayment (IBR), Pay As You Earn (PAYE), Revised Pay As You Earn (REPAYE), and Income-Contingent Repayment (ICR). For Parent PLUS loans, only ICR is available for student loan forgiveness. Contact your student loan administrator for details. Importantly, only federal student loans qualify for income-related repayment. Each year you must re-certify your income and family size. Your monthly student loan payment equals 20% of your discretionary income. Also, be sure to submit an Employment Confirmation Form to the US Department of Education annually and whenever you change employers.
How Much Student Loan Forgiveness Can You Get?
- Public Service Loan Forgiveness: With Government Loan Forgiveness, you can receive a full student loan cancellation for your remaining student loan balance after making 120 monthly student loan payments on time and in full.
- Income-related repayment: With earnings-related payback, after 20 years (undergraduate student loans) or 25 years (graduate student loans) of student loan payments, you can receive full student loan forgiveness on your remaining student loan balance.
Remember to consolidate Parent PLUS loans
To qualify for government loan forgiveness, you must have direct loans. So if you have a Parent PLUS loan, you should first consolidate the Parent PLUS loans with the US Department of Education. This converts your Parent PLUS loan into a direct consolidation loan. Then you can register for income-related reimbursement (ICR). If you have multiple children in college, you should wait until your youngest child graduates for all of your Parent PLUS loans to be absorbed.
If you have already enrolled in government loan forgiveness but previous payments were deemed ineligible, be sure to complete the limited student loan forgiveness waiver.
Will your student loan be cancelled?
You may be wondering if a large-scale student loan foreclosure would cancel Parents PLUS loans. It depends on. Senator Elizabeth Warren (D-MA) and Senate Majority Chuck Schumer (D-NY) have proposed canceling up to $50,000 in student loans for student loan borrowers. While that plan has stalled in Congress, they are now hoping that President Joe Biden will sign an executive order to terminate student loans for millions of student borrowers. (Biden canceled $15 billion in student loans.) Some parents may qualify, some may not. (Here’s who doesn’t get student loan forgiveness). For example, any proposed cancellation of a student loan may only apply to direct loans. Technically, Parents PLUS loans may need to be consolidated first to qualify. Second, the Warren and Schumer proposal puts an annual income cap of $125,000. So if you have Parents PLUS Loan and earn more than this income threshold, you do not qualify for student loan cancellation. At this time, there is no indication that Congress or the President plans to broadly cancel student loans for borrowers. So if you’re looking for student loan relief, you’ll find better luck focusing on government loan forgiveness or an income-based repayment plan.
Make sure you have a student loan repayment game plan because the temporary student loan relief is ending soon. Here are some smart options to pay off student loans faster: