Best Strategies for Parent PLUS Loan Forgiveness After July 2025

Parent PLUS Loan borrowers have until July 1, 2025, to take advantage of the double-consolidation loophole, which provides access to all income-driven repayment plans — including the new SAVE plan. Because of this rule change, far fewer Parent PLUS borrowers will receive loan forgiveness after 2025. But it’s still possible with good planning. Here’s how.

Who can get Parent PLUS Loan forgiveness after July 2025?

After July 2025, you can still get loan forgiveness by consolidating your Parent PLUS Loans. However, you’ll have to use the only remaining eligible IDR plan: the income-contingent repayment (ICR) plan.

Unfortunately, this means Parent PLUS borrowers will be stuck with higher monthly payments and a longer loan forgiveness timeline than other IDR plans. 

How does ICR work?

To take advantage of student loan forgiveness programs or lower monthly payments based on income, you’ll need to consolidate your Parent PLUS Loans into a federal Direct Consolidation Loan. This, in turn, gives you access to the ICR plan.

Income-contingent repayment is based on the lesser of either:

1. 20% of your discretionary income (divided by 12), or
2. The amount you’d pay with a fixed monthly payment over 12 years (adjusted based on income)

ICR monthly payments also factor in a 100% federal poverty line deduction based on your family size, and require 25 years of repayment before your remaining loan balance is forgiven.

In comparison, the SAVE plan only uses 5% to 10% of your discretionary income (depending on undergraduate versus graduate loans) and a poverty line deduction of 225%.

You can see how costly the ICR plan will be for Parent PLUS borrowers after July 2025 versus those who use the double-consolidation loophole before it closes.

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Which parent needs to borrow the Parent PLUS Loans to get forgiveness?

Student loan repayment is all about strategy, and this includes deciding which parent should take out the Parent PLUS Loan to begin with. In most cases, the parent with the lowest income should sign for the loans. Here’s why.

Most Parent PLUS borrowers are nearing or already into retirement age. If your income is low enough, or mostly from Social Security, you can file taxes separately and take advantage of significantly lower monthly payments.

The key to this approach is making sure you put all of the Parent PLUS Loans in the name of the person who’s primarily receiving Social Security income or a very modest retirement income.

For example, let’s say Edward earns around $50,000 to $60,000 per year and Lisa has a retirement income of around $30,000 with half of that being Social Security. If all of their Parent PLUS Loans are in Lisa’s name, they can file taxes as “married filing separately”.

Lisa’s ICR payment would be calculated using an adjusted gross income (AGI) of around $25,000. Because they filed taxes separately, she’d have a family size of one, putting her federal poverty line deduction at approximately $15,000. Therefore, they’d only pay 20% of $10,000 worth of discretionary income, which comes out to only $2,000 per year.

This can be a great strategy for Parent PLUS borrowers who need access to affordable monthly payments if one spouse earns below $50,000 in retirement after the loophole closes in 2025.

Related: Parent PLUS Loan Calculator

Who is Parent PLUS forgiveness with ICR ideal for?

After 2025, Parent PLUS forgiveness using the ICR plan will be best for borrowers who:

• Have a five-figure combined household income
• Have one spouse who earns a low-to-mid-five-figure income and the other spouse earns anything in the low-six figure range or less

If you fall into either of these scenarios, ICR can let you access Public Service Loan Forgiveness (PSLF) or general IDR forgiveness on top of lower monthly payments

When you can’t get Parent PLUS forgiveness

The double-consolidation loophole can benefit a lot of Parent PLUS Loan borrowers, but only if the double consolidation process is completed before July 2025. It isn’t a strategy that loan servicers will walk you through, so it takes extra effort on your end.

For those who miss the opportunity and have to consolidate after July 2025, you probably won’t get Parent PLUS Loan forgiveness if you earn six figures. Additionally, the married filing taxes strategy won’t work out if your spouse earns more than $200,000 annually because the cost of filing separately is too high to justify the trade-off of lower student loan payments.

Related: Double Consolidation Loophole Steps

How to delay payments on Parent PLUS Loans

For many Parent PLUS borrowers, the name of the repayment game should be “delay, delay, delay” to have payments begin when you’re in a lower income stage of life. In which case, you have a few tools at your disposal:

• You can request up to three years of forbearance if you’re experiencing financial hardship.
• You can delay using the Graduated Extended Payment Plan if you’ll make way less income later and you’ve already exhausted your forbearance options.
• After consolidating, you can access an additional three years of forbearance.

You also have the option to defer payments for the entire length of your child’s education, and you can keep deferring if another child goes to school.

For example, let’s say you have four kids who all make their way through higher education. You can potentially defer payments for 10+ years until the last one graduates. You can then request forbearance for up to three years. At that point, you can consolidate and score another three-year forbearance.

With this strategy, the whole goal is delaying payments that would be substantially higher during your income-earning years.

What’s the worst mistake Parent PLUS borrowers make?

Here are the two worst mistakes we see Parent PLUS borrowers making:

1. Having both parents take out Parent PLUS Loans in their name. Only one parent can sign the promissory note for a Parent PLUS Loan. So, it needs to be an all-or-nothing approach to borrowing, meaning only one parent should carry the full Parent PLUS debt. Don’t split the load.
2. Borrowing in the name of the higher-earning parent. This puts you on the path to higher monthly payments. Instead, put all of the Parent PLUS Loan debt in the lower-earning spouse’s name, and then plan to file taxes separately.

When it comes to IDR repayment, the lower the income, the better. It’s important to plan what your retirement years will look like in advance to map out the best Parent PLUS strategy.

Get Parent PLUS forgiveness help

Student Loan Planner has a strong reputation for helping Parent PLUS Loan borrowers. Our team of student loan debt experts can help plan for unique scenarios, such as taking out a new Parent PLUS loan after double consolidation and other unconventional strategies you won’t find elsewhere.

With the impending Parent PLUS cliff, you need to act with urgency to access better repayment options before the July 2025 phaseout. Schedule a Parent PLUS consult today.

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