Are Parent PLUS Loans Eligible for PSLF?

‍Parent PLUS Loans are eligible for the main Public Service Loan Forgiveness (PSLF) Program, but the loans don’t qualify for one of the program’s newest relief opportunities: the limited PSLF Waiver.

Since the Public Service Loan Forgiveness Program was created in October 2007, lawmakers have made three main changes to allow more parents and other public servants to benefit.

The first fix to the PSLF Program was made in 2017 when Congress created the Temporary Expanded Public Service Loan Forgiveness Program. TEPSLF gave borrowers in the Graduated Repayment or Extended Repayment plans credit towards PSLF even though they made their monthly payments under the wrong plan.

The next change occurred last October when the Biden Administration introduced the PSLF Waiver. This temporary program allows borrowers with the wrong loans — Federal Family Education Loans and Perkins Loans — to get retroactive credit toward PSLF for any payments they made toward their loans, even if the payments were late or for less than the amount.

The limited waiver has been a huge success. Over 113 thousand public servants have received $6.8 billion in loan cancellation through PSLF. But the White House — without explanation — locked parent borrowers out of this opportunity.

The last tweak came this year as part of a one-time account adjustment toward income-driven repayment forgiveness. Under the IDR Waiver, the Education Department will credit all borrowers, including parents, for time spent in forbearances that lasted over 12 straight months or 36 or more months cumulatively.

Ahead, learn how to get your parent loans forgiven if you work in public service.

Parent PLUS Loan and public service program eligibility:

• Public Service Loan Forgiveness: Parents qualify.

• TEPSLF: Parents qualify.

• PSLF Waiver: Parents qualified for their student loan debt but not the PLUS loans borrowed for their children.

• IDR Waiver: Parents qualify.

Related: Parent PLUS Loan Forgiveness

Parents who work for the government or a nonprofit and borrow federal student loans to pay for their child’s education will have their Parent PLUS Loan debt erased under the Public Service Loan Forgiveness Program. Follow these steps to get

• Step 1 – Consolidate your Parent PLUS Loans. Only payments made on Direct Loans qualify for PSLF. You may have non-qualifying loans, depending on when your child went to college and whether you borrowed federal loans to pay for your education. You can check what type of loans you have and, if you need to, consolidate the loans for free on the Federal Student Aid website, studentaid.gov.

• Step 2 – Enroll in a qualifying repayment plan. The Standard Repayment Plan and the income-driven repayment plans — IBR, ICR, PAYE, and REPAYE — are the only repayment options that qualify for PSLF. Because the Standard plan pays off the loan in 10 years, you should enroll in the Income-Contingent Repayment plan after consolidating your loans into a federal Direct Consolidation Loan to get the maximum relief.

• Step 3 – Make 120 qualifying payments. Once enrolled in the ICR Plan, you must make your monthly payments within 15 days of the due date; otherwise, it won’t count towards the 120 payment requirement. You can get around this rule by prepaying your next 12 payments after completing the annual IDR recertification.

• Step 4 – Certify your qualifying employment. Public service forgiveness is open to all full-time employees of local, state, and federal government and non-profit organizations. To enroll, you must submit an Employment Certification Form to the loan servicer* for every public service job you’ve held since the program was created in October 2007. If you’re unsure whether your employer qualifies, use the PSLF Help Tool to search the employer database using the employer’s identification number from your W2.

* Until this year, FedLoan Servicing held an exclusive contract with the U.S. Department of Education to service all loans enrolled in the public service program. The department hired MOHELA to replace FedLoan as the program’s administrator after the company announced it was ending its contract with the government at the end of 2022.

Learn More: Parent PLUS Loan Repayment Options

Parent PLUS Loans aren’t eligible for the Limited PSLF Waiver.  So if you worked in public service for a decade or more and only have parent loans — that is, you did not borrow federal loans for your own education — you cannot use the waiver to get retroactive credit toward PSLF.

Still, some people who took out loans for themselves and their children said they consolidated the loans, applied for the waiver and got a discharge letter for the whole balance, which included the parent loans.

Will it work for you? There’s no way to know for sure without going through the process. The benefit is that you may be able to eliminate your debt faster. The downside is that combining parent loans with your loans makes you ineligible for better IDR Plans like IBR and REPAYE, which can make your monthly payments more expensive.

Along with forgiveness for public service work, the Education Department offers a few other student loan forgiveness programs:

• Income-driven repayment forgiveness. Income-Contingent Repayment caps your monthly payment amount at 20% of your discretionary income. It also extends your repayment term to 25 years. After you make your 300th loan payment, any remaining balance is forgiven. Depending on the IRS’s rules at that time, that amount may be considered taxable income, adding to your total tax bill.

• Death forgiveness. The department writes off the remaining Direct PLUS Loan balance when you die or the child you borrowed the loan for dies. Your spouse will not inherit the debt.

• Total and Permanent Disability Discharge. You can request your loans be discharged if you suffer a physical or mental disability that leaves you unable to work. But if your child becomes permanently disabled, you’re still on the hook for the loans.

While technically not a forgiveness program, another option is to discharge parent loans in bankruptcy. The process is hard and can be costly, but if successful, bankruptcy could erase the entire loan balance. Read more about Parent PLUS Loan bankruptcy discharge.

Learn More: Can a Parent PLUS Loan Be Transferred to the Student?

Parent PLUS Loans are eligible for public service forgiveness, but navigating the program’s complex rules and the changes can be tricky.

Let’s talk if you need help figuring out how to get your loans forgiven. Schedule a 10-minute phone call so we can go over your federal and private student loans to devise a plan of attack.

UP NEXT: Parent PLUS Loans and Retirement Forgiveness