Posted 2017-07-16

A Parent's Guide to Student Loan Forgiveness

Are you the proud parent of a college student? If so, chancesare you might also be the owner of an overwhelming parent plus loan. While youare surely happy for your child, you don't want to repay their educationexpenses forever, right? Luckily, there are several student loan forgivenessprograms to help refinance student loans and parent plusloans.


Loan forgiveness programs can be very beneficial, for both peaceof mind and wallet. Avoid loan default with parent plus loan forgivenessprograms, and more! After all, you don't want to find yourself in student loanbankruptcy territory (yikes!) In this comprehensive parental guide to studentloan forgiveness, we'll discuss the best options for consolidating studentloans and debt forgiveness.

ParentPlus Loan: Overview

By now, you might already be aware of the ins and outs of directparent plus loans. However, it's always useful to have a brief recap of all theessential information you need to know as a parent borrower.


 There is a fixed interest rate of7% (though this may change annually).

 For current disbursements made on or after July 1, 2017until July 1, 2018.

 You repay the loanprovider directly (U.S Department of Education).

 You begin repayment as soon as the loan is fullydisbursed.

 There are several student loan repaymentplans available.

 If you have trouble repaying, deferment or forbearance optionsare available.

StudentLoan Forgiveness: Your Options

If you have difficulty repaying student loans, there areresources to help you. You can either temporarily halt payments, reduce thepayment amount, or have the loans entirely forgiven.

Defermentvs Forbearance

Defermentmeans that you can request to postpone payments. However, interest will stillaccrue during this grace period.


If you have a direct parent plus loan and you request adeferment, you are still responsible for paying any interest that accrues. Youcan either pay the accrued interest off immediately, or let it be capitalizedon your principal loan amount. 


With forbearance, therules are a bit clearer as there will always be interest that accrues, nomatter the type of student loan you have. Forbearance requests allow theborrower (student or parent) to temporarily put a halt on making payments. Aswith mostly everything, conditions doapply.


There are threetypes of repayment plans available to parent borrowers of a directparent plus loan:

 Standard - Fixed monthly payments for up to 10 years.

 Graduated - Start payments off at a lower rate, andslowly increase. Up to 10 years.

 Extended - Pay off your parent plus loan over the courseof 25 years (graduated or fixed rate).

LoanForgiveness (Discharge or Cancellation)

There are certain criteria you need to satisfy in order to getyour student loans forgiven or cancelled.


Loanforgiveness (in part or in total) is possible under certaincircumstances:

 In the case of death.

 In cases of bankruptcy, you need to show proof thatrepaying the loan would mean severe hardship.

 If you become totally or permanently disabled.

 The student withdrew, or the university closed beforethe student could finish the program.

 ..and more.


For the complete list of criteria regarding parent plus loanforgiveness, see here.

StudentLoan Forgiveness: Important Reminders

It is important to remember that you must first qualify for debtforgiveness. If in doubt, discuss student loan relief and loan forgivenessprograms with your loan provider.


While your request for loan discharge is under review by yourloan provider, you must continue to make payments. Loan default can make yourloan delinquent. Loan delinquency can negatively impact your credit and mayresult in unwanted consequences.


If your request for loan forgiveness is denied, the decision isusually not repealed. If your request is accepted, you no longer have to makepayments on your parent plus loan.


See herefor more answers to commonly asked questions.

AParent's Guide to Student Loan Forgiveness: Recap

While there may be a few steps to take for satisfying studentloan forgiveness criteria, just knowing that there are options available shouldrelieve you just a bit. Repaying student loan debt is quite the daunting task.But it doesn't have to be.


Whether you need complete debt relief or simply loanrefinancing, federal student loan forgiveness programs have great resources tohelp you out. They are just a call or click away. With a repayment plan thatworks for you, you can avoid loan bankruptcy and loan default. Trust me, bothyou and your loan provider want to see your student debt taken care of.


Above all, remember that student loan forgiveness is possible.Now you can be even prouder of your college grad!

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