How to Refinance Parent PLUS Loans in Your Child’s Name

How Student Loan Hero Gets Paid

How Student Loan Hero Gets Paid

Student Loan Hero is compensated by companies on this site and this compensation may impact how and where offers appears on this site (such as the order). Student Loan Hero does not include all lenders, savings products, or loan options available in the marketplace.

Advertiser Disclosure

Student Loan Hero Advertiser Disclosure

Student Loan Hero is an advertising-supported comparison service. The site features products from our partners as well as institutions which are not advertising partners. While we make an effort to include the best deals available to the general public, we make no warranty that such information represents all available products.

Editorial Note: This content is not provided or commissioned by any financial institution. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by the financial institution.

refinance-parent-plus-loans
Logo

We’ve got your back! Student Loan Hero is a completely free website 100% focused on helping student loan borrowers get the answers they need. Read more

How do we make money? It’s actually pretty simple. If you choose to check out and become a customer of any of the loan providers featured on our site, we get compensated for sending you their way. This helps pay for our amazing staff of writers (many of which are paying back student loans of their own!).

Bottom line: We’re here for you. So please learn all you can, email us with any questions, and feel free to visit or not visit any of the loan providers on our site. Read less

Refinance rates with Splash Financial start at 1.89%.

Checking your rates won’t affect your score.

Check out Splash Financial

As a parent, you might have taken out parent PLUS loans to help your children with their education. But as you’re getting closer to retirement age and managing multiple financial priorities, you might start to wonder how to refinance parent PLUS loans to lessen the burden of repayment.

Parent PLUS loans carried a 7.08% interest rate for the 2019-2020 academic year, which is on the higher end for federal student loans and can make it difficult to get ahead on principal payments. But if you transfer parent PLUS loans to the student, you could pass on the responsibility of paying back these loans to your child.

Keep reading to learn more about how to refinance parent PLUS loans in your child’s name and whether it’s right for you.

See Student Loan Refinance Rates - No hard credit check

$
Disclosures.

Advertising Disclosures

The offers that appear on this site are from companies from which LendingTree receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). LendingTree does not include all lenders, savings products or loan options available in the marketplace.

What portion of LendingTrees services in connection with my loan request is free?

There is no cost to submit a loan request, get matched with lenders and receive conditional loan offers or quotes. You may review the conditional loan offers or quotes and talk to the lenders at no cost. Of course, the lender you choose may require a fee to process your formal loan application, appraisal, and/or credit report, but until you agree to pay the lender any fee(s), you may shop with LendingTree at no cost.

How does LendingTree get paid?

LendingTree does not charge you, the consumer, a fee for its services. Who pays our bills? The lender. Of course, you will be responsible for paying any loan processing, closing costs or other fees to the lender with whom you close.

LendingTree Advertisement Disclosure (last updated June 8, 2018):

LENDINGTREE, LLC IS A MARKETING LEAD GENERATOR AND IS A DULY LICENSED MORTGAGE BROKER, AS REQUIRED BY LAW, WITH ITS MAIN OFFICE LOCATED AT 1415 VANTAGE PARK DRIVE, SUITE 700, CHARLOTTE, NC 28203, TELEPHONE NUMBER 1-800-555-8733.

For a current list of applicable state licensing and disclosures, click Licenses and Disclosures or call for details.

LendingTree, LLC NMLS Unique Identifier # 1136, AK Mortgage Broker/Lender License #AK1136; AZ Mortgage Broker, License #’s MB-0902469 and MB-0909882; California Dept. of Corporations, California Finance Lenders Law License No. 6037234; CO Mortgage Company Registration Regulated by the Division of Real Estate; CT Mortgage Broker, License #4164 – MORTGAGE BROKER ONLY, NOT A MORTGAGE LENDER OR MORTGAGE CORRESPONDENT LENDER; Georgia Mortgage Broker/Processor License #12989; Illinois Residential Mortgage License #0005433; Kansas Mortgage Company License #MC.0002279; MA Mortgage Broker License #MB1136 – We arrange but do not make loans; ME Loan Broker License #CSO06321; Licensed by the Mississippi Department of Banking and Consumer Finance as a Mortgage Broker License #1136; MO Mortgage Broker License #10-1261, 727 N. First Street, Suite 310, Saint Louis, Missouri 63102; MT Mortgage Broker, License #1097; Licensed by the New Hampshire Banking Department; NJ Residential Mortgage Broker License # 0801779 – broker will not make any mortgage loan commitments or fund any mortgage loans; NV Mortgage Broker License #1698; LT Technologies in lieu of true name LendingTree, LLC, Registered Mortgage Broker– NYS Department of Financial Services License #A004890 – Broker arranges mortgage loans with third-party providers; OH Mortgage Broker License #MB.802159.000, 7494 Preserve Place, West Chester, OH 05069; OR Mortgage Lending License #ML-1862; PA Licensed Mortgage Broker by the PA Department of Banking #20298; Rhode Island Licensed Loan Broker #20062113LB; Texas Mortgage Company License Unique Identifier #1136, Mr. Shan Guo #300978, Residential Mortgage Loan Originator at 1312 Village Creek Drive Suite 900, Plano TX 75093; VA Mortgage Broker License #MC-1052, Licensed by the Virginia State Corporation Commission; WA Mortgage Broker License #MB1136.

Advertised Terms and Information

  • The information and disclosures above relate to advertised terms made by or through LendingTree.
  • Interest rates and terms are from a lender or lenders with whom LendingTree may match you and that offer the particular product. The disclosures are current as of the date indicated.
  • LendingTree is not a lender in any transaction and does not make loans, loan commitments or lock-rates. All credit decisions, including loan approval and the conditional rates and terms you are offered, are the responsibility of the participating lenders and will vary based upon your loan request, your particular financial situation, and criteria determined by the lenders to whom you are matched. Not all consumers will qualify for the advertised rates and terms. APR may be in lieu of rebates or incentives. Dealer participation may affect consumer cost.
  • You may not be matched with a lender making a particular conditional loan offer, and LendingTree does not guarantee that any lender will make you a conditional loan offer. LendingTree arranges for multiple conditional loan offers through its network of nonaffiliated lenders. See the Terms of Use Agreement for more details. The Terms of Use Agreement governs these advertised Terms and Information.
  • FICO score means the FICO credit score report that a lender receives from a consumer reporting agency.

Terms & Conditions apply.
NMLS#1136

How to refinance parent PLUS loans in the student’s name

Parent PLUS loans are made directly to parents for their child’s education. The way things are set up now through the Department of Education, parents cannot transfer these federal loans to a child, and they are solely responsible for paying back the loan.

But there’s a way to get around this: refinancing parent PLUS loans in your child’s name. To refinance parent PLUS loans, your child must apply and be approved for the loan through a private student loan lender. They would have to supply information about their credit score, school and degree.

Laurel Road is one of a handful of student loan refinancing companies that allows parents to refinance parent PLUS loans in their student’s name. Sofi and CommonBond offer this option, as well.

Each lender will have varying eligibility requirements, but typically, lenders want the child to prove they have the financial means to pay back the loan themselves.

SoFi, Laurel Road and CommonBond consider information such as income, school and type of degree. To qualify, your child must have earned a bachelor’s degree or higher.

Dan Macklin, a co-founder of student loan refinancing company SoFi, noted similar eligibility requirements.

“SoFi will take into account several factors, such as (the applicant’s) eligibility, education, career experience, monthly income relative to expenses and financial history in determining whether to refinance a parent PLUS into a loan in the graduate’s name,” Macklin said.

To refinance and transfer the parent PLUS loans to your child, follow these three steps:

  1. Ask your child to apply for a student loan in their name with a lender like SoFi, Laurel Road or CommonBond. You can help your child complete the application, but the lender may approve or reject it based on their information alone.
  2. Include the parent PLUS loan on the refinancing application and note that it is under your name.
  3. If approved, the lender will issue your child a new loan, which can be used to pay off your parent PLUS loan.

The new loan may have different terms and conditions, and potentially a lower interest rate, as well. Unlike the parent PLUS loan, the new loan will be entirely in your child’s name.

“Transferring a loan from parent to child absolves parents from the debt obligation and enables the child to select the appropriate loan terms,” Macklin said. “The child may be able to reduce monthly payments on the outstanding debt, as some parent PLUS loans have rates as high as 8.50%. It also enables the parent to refocus their own goals, such as saving for retirement.”

Review the benefits of refinancing parent PLUS loans

There are many benefits to refinancing parent PLUS loans, including:

If you refinance parent PLUS loans and pass on the responsibility to your child, they could stand to save money on interest. Also, they could take advantage of the unique benefits offered by some lenders, such as unemployment protection, career services and networking events.

Consider the drawbacks of refinancing parent PLUS loans

Before you decide to refinance your federal parent PLUS loans, there are some downsides you should also be aware of, including:

  • By refinancing with a private lender, you’ll lose federal student loan benefits, such as access to income-driven repayment options and Public Service Loan Forgiveness (PSLF).
  • The legal liability for the loans will be transferred to the child, as the parent PLUS loans will be paid off, and your child will now have to repay the new loan.
  • The process is not reversible.

If you want to refinance parent PLUS loans, you and your child should be on the same page. Both you and your child should understand the financial and legal implications of refinancing and also have a firm grasp of what you may be giving up.

Explore other options for immediate relief

Even if you know how to refinance parent PLUS loans in your child’s name, you might decide this move isn’t right for you and your family, especially if you’re relying on federal benefits. Fortunately, you have a couple of other options for managing your parent PLUS loan.

For one, you could explore an Income-Contingent Repayment (ICR) plan, which adjusts your monthly payments in accordance with your discretionary income. Note that you’ll have to consolidate your parent PLUS loans before they’re eligible for ICR.

Another option is loan forgiveness through a program such as Public Service Loan Forgiveness. If your job makes you eligible for PSLF or a similar program, you could get some or all of your balance canceled. Some employers even offer student loan repayment assistance to help indebted employees.

While none of these options will get rid of your debt overnight, they could provide relief. And if you do decide to refinance your parent PLUS loans in your child’s name, you could say goodbye to your debt for good.

Rebecca Safier contributed to this report.

Interested in refinancing your Parent PLUS loans into your child's name?

Here are the top lenders of 2021!
LenderVariable APR 
1.89% – 5.99%1

Visit Splash

1.99% – 5.64%2

Visit Earnest

1.99% – 6.84%3

Visit CommonBond

Check out the testimonials and our in-depth reviews!
1 Important Disclosures for Splash Financial.

Splash Financial Disclosures

Terms and Conditions apply. Splash reserves the right to modify or discontinue products and benefits at any time without notice. Rates and terms are also subject to change at any time without notice. Offers are subject to credit approval. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet applicable underwriting requirements. Not all borrowers receive the lowest rate. Lowest rates are reserved for the highest qualified borrowers. If approved, your actual rate will be within a range of rates and will depend on a variety of factors, including term of loan, a responsible financial history, income and other factors. Refinancing or consolidating private and federal student loans may not be the right decision for everyone. Federal loans carry special benefits not available for loans made through Splash Financial, for example, public service loan forgiveness and economic hardship programs, fee waivers and rebates on the principal, which may not be accessible to you after you refinance. The rates displayed may include a 0.25% autopay discount.

The information you provide to us is an inquiry to determine whether we or our lenders can make a loan offer that meets your needs. If we or any of our lending partners has an available loan offer for you, you will be invited to submit a loan application to the lender for its review. We do not guarantee that you will receive any loan offers or that your loan application will be approved. Offers are subject to credit approval and are available only to U.S. citizens or permanent residents who meet applicable underwriting requirements. Not all borrowers will receive the lowest rates, which are available to the most qualified borrowers. Participating lenders, rates and terms are subject to change at any time without notice.

To check the rates and terms you qualify for, Splash Financial conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, the lender will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.

Splash Financial and our lending partners reserve the right to modify or discontinue products and benefits at any time without notice. To qualify, a borrower must be a U.S. citizen and meet our lending partner’s underwriting requirements. Lowest rates are reserved for the highest qualified borrowers. This information is current as of Feburary 1, 2021.


2 Important Disclosures for Earnest.

Earnest Disclosures

To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.

Earnest fixed rate loan rates range from 2.98% APR (with Auto Pay) to 5.49% APR (with Auto Pay). Variable rate loan rates range from 1.99% APR (with Auto Pay) to 5.34% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of October 26, 2020, and are subject to change based on market conditions and borrower eligibility.

Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.

The information provided on this page is updated as of 10/26/2020. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at [email protected], or call 888-601-2801 for more information on our student loan refinance product.

© 2020 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.


3 Important Disclosures for CommonBond.

CommonBond Disclosures

Offered terms are subject to change and state law restriction. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900), NMLS Consumer Access. If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown. ‍All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 0.15% effective Jan 1, 2021 and may increase after consummation.