Written By Melanie Lockert
Updated on March 8, 2024
The Public Service Loan Forgiveness (PSLF) program offers borrowers a repayment relief option in exchange for service in the public sector. After 10 years of working for a qualifying employer, borrowers get a nice “thank you” from the federal government in the form of student loan forgiveness. Your remaining loan balance after making 120 qualifying payments is discharged, tax-free.
It’s the most generous program offered. But do Parent PLUS Loans qualify for PSLF? They do, but it requires some action to meet eligibility first. Additionally, new changes coming in 2025 impact the options Parent PLUS borrowers have.
Read on to learn more about how to qualify for PSLF as a parent and what to know moving forward.
Challenges of PSLF eligibility for Parent PLUS borrowers
In borrowing Parent PLUS Loans to cover your child’s higher education costs, you might be facing steep interest rates. Your repayment options also aren’t as generous. That’s one of the challenges for parent PLUS borrowers when it comes to PSLF eligibility.
Currently, you can repay Parent PLUS Loans under one of three repayment plans:
- Standard Repayment Plan.
- Graduated Repayment Plan.
- Extended Repayment Plan.
The PSLF eligibility requires that borrowers enroll in an income-driven repayment (IDR) plan or a Standard Repayment Plan. The latter, however, defeats the purpose of PSLF since it’s designed for loan payoff in 10 years.
See that list above? IDR isn’t on there.
If you’re a parent PLUS borrower, you must first consolidate your Parent PLUS Loan into a Direct Consolidation Loan. By doing so, the consolidated loan is now eligible for only one of the IDR plans — the Income-Contingent Repayment (ICR) plan.
That repayment option gives parent borrowers an opening for PSLF eligibility. But there’s another key component to qualify — and that’s working for an eligible employer.
You might have worked in the public sector for a while, but you need to put in 10 years of service at a qualifying employer once your loans are consolidated. In general, most monthly payments before consolidation don’t count toward PSLF. This rule, however, might change with the one-time IDR account adjustment.
If you’re nearing retirement age, that might mean working longer than you anticipated to qualify for forgiveness.
Parent PLUS Loan PSLF eligibility: Pre-2025
Let’s face it, parent PLUS borrowers get the short end of the stick when it comes to benefits and protections relative to other student borrowers. That’s why it’s worth putting in a little work and consolidating your Parent PLUS Loans if you meet the eligibility requirements for PSLF.
Taking action before 2025 might unlock additional savings and benefits, which we cover below. Here are some steps to take.
Confirm employer eligibility
Typically qualifying employment falls into two categories — nonprofit organizations and government agencies. You must work what’s considered full-time, which equates to 30 hours per week or more.
To keep track of your employment, it’s smart to certify your employer each year. You can also use the PSLF Help Tool on the StudentAid.gov site to help you get started.
Review your qualifying payments
Remember, you must consolidate your Parent PLUS Loans first and typically only the payments under the Direct Consolidation Loan count toward the minimum 120 payment requirement.
Right now, there are major changes in the student loan space, one being a one-time IDR account adjustment. The good news is this might mean that previous non-qualifying loan payments might be counted toward your PSLF goal. Discuss this option with your loan servicer if you have questions.
Take advantage of the double consolidation loophole
Consolidating your Parent PLUS Loan to access the ICR plan is a great way to open up Parent PLUS Loan forgiveness opportunities. The downside is that ICR payments are the highest among all IDR plans. Its payments are generally 20% of your discretionary income, compared to 10% to 15% for other IDR options.
To make payments more affordable, Parent PLUS borrowers can take advantage of the double consolidation loophole. If you have multiple Parent PLUS Loans, this could be a great strategy for you.
Essentially, you undergo a Direct Consolidation for a couple of Parent PLUS Loans with Servicer A, and separately consolidate a couple of other loans with Servicer B. Use paper applications, to avoid them being lumped together. Also, submit an application for IDR and select ICR.
After everything is settled and confirmed with those two consolidations, take those two consolidated loans and combine them again. This time, you can do the consolidation process online. Choose MOHELA as your loan servicer and select one of the other IDR plans, such as SAVE.
From there, you can score a lower payment on the other IDR plans. Be sure to stay on top of recertifying your income and employment to continue on the path to PSLF.
This is a great way to lower costs and get PSLF for Parent PLUS borrowers. Unfortunately, this benefit is getting wiped away in 2025.
Navigating PSLF for parents: Post-2025
The double consolidation loophole allows Parent PLUS borrowers to access other IDR plans with more attractive repayment options. Who wouldn’t want to cut payments from 20% to 10% of their income? But new student loan regulations are putting an end to this practice on July 1, 2025.
Loopholes are workarounds and now that this strategy is more obvious, the government wants Parent PLUS borrowers to only qualify for ICR as originally intended. For now, you still have time to try this strategy, but be aware that it’s coming to an end in a couple of years.
Without the double consolidation loophole, you can still qualify with one consolidation and paying via ICR and completing 10 years at a public service job.
Although it won’t affect your PSLF timeline — which is 10 years and 120 on-time qualifying payments — it’ll mean having higher payments.
As an example, if you’re earning $50,000 but owe twice as much with $100,000 in Parent PLUS Loans, your ICR payment would be $590. Under double consolidation and access to the new SAVE plan, your payment is cut to $143.
That’s quite a difference in your student loan repayment amount that can impact your personal finances, retirement planning and cash flow.
Strategies for parents pursuing PSLF
If you’re a Parent PLUS borrower pursuing PSLF, here are some strategies to help you achieve student loan forgiveness through the program.
- Focus on career planning. Employment is the main eligibility requirement for PSLF and you need to put 10 years time into your career. Depending on your age and where you’re at, this may mean an extended working career. Continue to certify your employment and make sure you can stick with your job to get PSLF.
- Balance PSLF with other financial goals. PSLF might tie you to a certain type of employment while waiting for forgiveness. Make sure you’re still focusing on other financial priorities such as retirement, and paying off private student loans and high-interest debt like credit cards.
- Stay well-informed about loan repayment options. The rules around federal student loans and forgiveness are constantly being updated. Stay on top of the latest news, especially if you plan on pursuing double consolidation before 2025. Taking this approach might help you qualify for other IDR options that offer more benefits.
Preparing for your PSLF and Parent PLUS journey
Although parent borrowers with PLUS Loans can qualify for PSLF through a Direct Consolidation Loan, research your options. Confirm your eligibility for the PSLF program and if you’re a good candidate. See how a double-consolidation strategy might serve you before 2025, versus what your payments might look like in 2025 under the ICR plan only.
Consider a double consolidation to access programs, like SAVE, so you can reduce your monthly payment dramatically.
If you need support to guide you through and help you make informed decisions about your student loan debt, book a consult with Student Loan Planner for personalized advice.
FAQ: Do Parent PLUS Loans qualify for PSLF?
Parent PLUS Loans on the surface are ineligible for PSLF because these loans don’t provide access to a qualifying repayment plan. However, if you consolidate your Parent PLUS Loans under a Federal Direct Consolidation Loan, you can access Income-Contingent Repayment (ICR) which is eligible for PSLF.
Parent PLUS borrowers can access student loan forgiveness programs by using a Direct Consolidation Loan. PLUS Loans for parents that are consolidated can be repaid under an ICR plan over 25 years to get forgiveness. If you work for a qualifying employer, you can consolidate and pay under ICR to have your remaining balance forgiven via PSLF after 10 years.
In general, payments made on Parent PLUS Loans don’t count toward PSLF. However, under the one-time IDR account adjustment some previous payments that weren’t counted might now be included.
Unfortunately, Parent PLUS Loans don’t qualify for the Temporary Expanded Public Service Loan Forgiveness (TEPSLF) program on their own. If you consolidate your Parent PLUS loans into a Federal Direct Consolidation Loan and can qualify for PSLF, you may be eligible for TEPSLF.
Not sure what to do with your student loans?
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