Parent PLUS Loan Refinancing vs. Keeping Federal Terms
Parents who took out federal PLUS loans to help pay for a child's education can consider refinancing into a private loan for a potentially lower rate, or keep the loan under its original federal terms and protections.
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Private Refinancing
The Parent PLUS loan is paid off with a new private loan, potentially at a lower rate for parents with strong credit, sometimes with the option to transfer the loan to the student in some private refinancing programs.
- Can secure a lower rate than the original PLUS loan for well-qualified borrowers
- Some private lenders offer the option to shift the refinanced loan into the student's name
- Forfeits federal PLUS loan protections and any income-driven repayment eligibility
- Loses access to any federal forgiveness programs tied to the original loan
Keeping Federal Terms
Keeping the Parent PLUS loan under its original federal terms, preserving eligibility for a specific income-driven repayment option available to PLUS borrowers and any applicable federal protections.
- Preserves eligibility for PLUS-specific income-driven repayment and federal protections
- No need to requalify based on current credit, since the loan terms remain as originally set
- PLUS loan rates are often higher than what a strong-credit parent could get through private refinancing
- Fewer plan options are generally available for PLUS loans than for direct student loans
Which one makes sense for you?
Private refinancing can offer meaningful savings for parent borrowers with strong credit who are confident they won't need federal-specific flexibility, and some programs offer the added option of transferring the loan to the student. Keeping federal terms preserves valuable protections and PLUS-specific repayment options, which can matter more for parents with less certain income stability.
Key cost factors.
- Parent borrower's current credit and income strength for a favorable private rate
- Value placed on preserving federal protections and repayment flexibility
- Whether transferring the loan to the student is a goal, which some private lenders allow
- Likelihood of needing income-driven repayment flexibility in the future
Before you decide.
- What rate would I realistically qualify for through private refinancing given my current credit?
- Do I want the option to eventually transfer this loan into my child's name, if available?
- How important is preserving federal repayment flexibility given my income stability?
Frequently asked questions.
Can a Parent PLUS loan be transferred to the student without refinancing privately?
Federal PLUS loans generally cannot be transferred to the student directly; a transfer of this kind is typically only available through certain private refinancing lenders that specifically offer that option.
All figures on this page are illustrative examples for general education, not quotes, appraisals, or guarantees of actual pricing. Actual costs vary by provider, location, project scope, and market conditions — always get a specific quote before making a purchasing decision.
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