Are Parent PLUS Loans Forgiven After 10, 20, or 25 Years?

• Parent PLUS loans can be forgiven after 10 years through the Public Service Loan Forgiveness program for eligible borrowers working in public service.

• There is no standard 20-year student loan forgiveness program for Parent PLUS loans. Still, borrowers can access more favorable repayment plans through the double consolidation loophole.

• Parent PLUS loans may be eligible for forgiveness after 25 years under the Income-Contingent Repayment plan or potentially sooner under Biden’s SAVE plan if using the double consolidation strategy.

Parent PLUS Loans have fewer forgiveness options than other federal student loans. Still, there are paths to loan forgiveness that can significantly reduce your loan payments over time.

You might be eligible for forgiveness after 10 or 25 years of repayment, depending on your circumstances. Although there’s no standard 20-year forgiveness option, recent changes implemented by the Biden administration have opened up new possibilities for Parent PLUS borrowers.

Related: Parent PLUS Loan Forgiveness

Your Parent PLUS loans can be forgiven after 10 years, but only if you meet specific requirements under the Public Service Loan Forgiveness program.

To qualify for PSLF, you must:

1. Work full-time for a qualifying employer. This includes government organizations at any level and non-profit 501(c)(3) organizations.

2. Make 120 qualifying payments. These must be made while you’re working for a qualifying employer.

3. Have Direct Loans. If your Parent PLUS loans are not Direct Loans, you’ll need to consolidate them into a Direct Consolidation Loan.

4. Be on an income-driven repayment plan. For Parent PLUS loans, this means you must be on the ICR plan.

The 120 payments for PSLF don’t need to be consecutive. You can pause and resume your progress if you leave and return to public service work.

Forgiveness through PSLF is tax-free, meaning you won’t owe taxes on the forgiven amount.

To apply for PSLF, submit the PSLF form annually to certify your employment through StudentAid.gov. After making 120 qualifying payments, submit the PSLF application for forgiveness of your remaining loan balance.

Related: Are Parent PLUS Loans Eligible for PSLF?

No, Parent PLUS loans are not typically forgiven after 20 years. Unlike other federal student loans, Parent PLUS loans are generally placed on a 25-year forgiveness timeline. This difference is due to specific decisions made by lawmakers regarding how Parent PLUS loans are treated compared to other types of federal Direct Loans.

While 20-year forgiveness is available under certain IDR plans for other types of federal loans, these options are not directly accessible to Parent PLUS borrowers. The 20-year forgiveness is typically offered under plans like Pay As You Earn (PAYE) for borrowers whom the U.S. Department of Education considers a “new borrower” or someone who only borrowed for undergraduate studies.

Parent PLUS loans have limited access to IDR plans in general.

To get IDR for Parent PLUS Loans, borrowers must first consolidate their loans into a Direct Consolidation Loan to enroll in any IDR plan. Even then, parent PLUS Loan borrowers are only eligible for the ICR plan, which offers forgiveness after 25 years, not 20.

There is a theoretical exception to this rule, but it’s rarely applicable in practice. A Parent PLUS borrower could potentially access PAYE (and thus 20-year forgiveness) if they:

1. Qualify as a “new borrower” under PAYE rules

2. Use the double consolidation loophole

3. Meet all other PAYE eligibility criteria

But this scenario is highly uncommon. It’s not a reliable option for most Parent PLUS borrowers.

Parent PLUS loans can be forgiven after 25 years under certain repayment plans. There are two main paths to 25-year forgiveness for Parent PLUS loans:

Traditional 25-Year Forgiveness

Parent PLUS loans are eligible for forgiveness after 25 years of repayment under the Income-Contingent Repayment (ICR) plan. Here’s what you need to know:

• Eligibility: To access ICR, you must consolidate your Parent PLUS loans into a Direct Consolidation Loan.

• Payment Amount: Your monthly payment will be the lesser of 20% of your discretionary income or what you would pay on a 12-year fixed repayment plan.

• Forgiveness Timeline: Any remaining balance is forgiven after making payments for 25 years.

• Taxes: Currently, the forgiven amount is considered taxable income.

SAVE Plan – Potentially Shorter Forgiveness

The Saving on a Valuable Education Plan, introduced by the Biden administration, offers a potential path to earlier forgiveness for Parent PLUS borrowers. But it comes with caveats:

• Double Consolidation: Parent PLUS borrowers must use the “double consolidation loophole” to access the SAVE Plan and complete this process before July 2025.

• Variable Forgiveness Timelines: Under SAVE, forgiveness could come as early as 10 years for loans of $12,000 or less. The timeline increases by one year for each additional $1,000 borrowed, up to the standard 25-year period.

• Payment Amount: Payments are capped at 10% of discretionary income, lower than the 20% under ICR.

• Tax Benefits: Forgiven amounts under SAVE are not considered taxable income.

• Legal Uncertainty: Federal courts have temporarily blocked loan forgiveness under this program, and its future application to double-consolidated Parent PLUS loans remains to be seen.

Related: Are Parent PLUS Loans Eligible for SAVE?

No, Parent PLUS loans are not forgiven if you refinance them with a private lender. Student loan refinancing of federal loans, including Parent PLUS loans, into private student loans eliminates all federal forgiveness options.

While forgiveness programs offer one path for managing your Parent PLUS loans, refinancing is another option worth considering. But make sure you understand how refinancing impacts your forgiveness options and other federal benefits.

What it is: Refinancing involves taking out a new private student loan to pay off your existing federal student loan debt.

How it works:

1. You apply for a new loan with a private lender.

2. If approved, the lender pays off your federal Parent PLUS loans.

3. You now owe the private lender, typically with new terms and interest rates.

Key considerations:

1. Forgiveness timeline: Refinancing eliminates the possibility of loan forgiveness after 10 or 25 years, as your loans are no longer backed by the federal government.

2. Potential benefits: Lower interest rates or lower monthly payments, depending on your credit score and financial situation.

3. Loss of federal protections: You’ll no longer be eligible for income-driven repayment plans, deferment, forbearance, or federal forgiveness programs.

Who should consider it: Borrowers who are confident they can repay their loans in full and want to potentially save on interest rather than pursuing long-term forgiveness options or needing federal protections.

Remember, refinancing is irreversible. Once you refinance federal loans into private loans, you can’t regain access to federal forgiveness programs or other benefits offered by the federal government. Carefully weigh this option against the potential for loan forgiveness and the flexibility of federal repayment options before deciding.

Related: Can Refinanced Student Loans Be Forgiven?

Parent PLUS loan forgiveness isn’t straightforward, but options exist to manage student loan repayment. While there’s no 20-year forgiveness, you might qualify for 10-year forgiveness through PSLF or 25-year forgiveness via income-driven repayment plans, potentially shortening your repayment term.

The double consolidation loophole could open up more favorable student loan repayment options, but it’s complex and time-sensitive. Refinancing is another strategy to reduce your repayment term, but it eliminates federal forgiveness possibilities like qualifying for the president’s cancellation plans.

Given the complexities and potential long-term impact of these decisions on your student loan repayment term, speak with customer service at Federal Student Aid or your loan servicer, or book a 1:1 consultation with one of our experts to explore your options.

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