Home Borrower Are Parent PLUS student loans eligible for a discount?

Are Parent PLUS student loans eligible for a discount?

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Q. I have a Parent PLUS loan. I just retired, so is this loan eligible for a loan forgiveness? What if I die, does it go away?

– Tired of debt

A. Student loans are a huge burden on millions of Americans, and the loans parents take out for their children are one of them.

Getting rid of student loans is not easy.

Typically, parent plus loans can be canceled or put on an income-based repayment plan if a parent is struggling to pay off this type of debt, said Karra Kingston, a bankruptcy lawyer in Union City.

First, to be eligible for an income-based repayment plan on the Parent Plus loan, the borrower must have started repaying on or after July 1, 2006, she said.

“To qualify for the income-based repayment plan, the monthly payment is based on 20% of the borrower’s discretionary income, which is defined as the amount by which the borrower’s adjusted gross income (AGI) exceeds 100%. poverty line, ”says Kingston. “If you can qualify for it, the loan will be canceled after 25 years of qualified one-time monthly payments. “

You may also be eligible for a student loan forgiveness under the public service student loan forgiveness scheme.

“Parent PLUS loans can be canceled if it is a federal loan and they have worked full time in a qualifying public service job,” Kingston said. “Typically the borrower would have to be on an income-based repayment plan for 10 years and that loan would be canceled.”

She stated that there are certain circumstances in which a Parent PLUS loan would be considered eligible for release. Some of them include:

  • Death of the parent or death of the student borrower. Once you die, the loan may be eligible for discharge.
  • If you or the student become permanently disabled.
  • Bankruptcy (although rare) could be a possibility of getting rid of the Parent PLUS loan.
  • If the school closed or was fraudulent, there may be grounds for canceling the loan.

Good luck to you with your debt.

Email your questions to [email protected].

Karin Price Mueller writes on Bamboo column for NJ Advance Media and is the founder of NJMoneyHelp.com. Follow NJMoneyHelp on Twitter @NJMoneyHelp. Find NJMoneyHelp on Facebook. Sign up for NJMoneyHelp.com‘s weekly electronic newsletter.



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