Can You Transfer a Parent PLUS Loan to a Student?

 July 20, 2021
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If you’re wondering how to transfer a parent PLUS loan to a student, we have good news: The student can take on the loan by refinancing it in their own name. As long as the student can qualify for refinancing on their own, they can assume full responsibility for the loan.

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

Transferring a parent PLUS loan to the student through refinancing: the basics

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 is a way to get around this if you’re thinking about how to transfer the parent PLUS loan to the student: refinancing parent PLUS loans in your child’s name. To refinance parent PLUS loans, your child will need to 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.

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

Dan Macklin, a co-founder of student loan refinancing company SoFi, noted the following 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,” he told Student Loan Hero.

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. 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(s).

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.”

Benefits of refinancing parent PLUS loans

There are many benefits to refinancing parent PLUS loans to the student, such as:

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

Drawbacks of refinancing parent PLUS loans

Before you decide to transfer your parent PLUS loan(s) to the student, 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 your 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.

Other options for immediate relief

Even if you know how to transfer parent PLUS loans to the student, 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(s).

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 loan(s) before they’re eligible for ICR.

Another option is loan forgiveness through a program like 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. You would also have to consolidate your parent PLUS loan(s) with this option, as PSLF requires that you repay under an income-driven repayment plan.

In addition, 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 loan(s) 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?

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4.44% – 8.09%3

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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 May 4, 2022.


2 Rate range above includes optional 0.25% Auto Pay discount. Important Disclosures for Earnest.

Earnest Disclosures

Student Loan Refinance Interest Rate Disclosure Actual rate and available repayment terms will vary based on your income. Fixed rates range from 2.99% APR to 8.24% APR (excludes 0.25% Auto Pay discount). Variable rates range from 1.99% APR to 8.24% APR (excludes 0.25% Auto Pay discount). Earnest variable interest rate student loan refinance loans are based on a publicly available index, the 30-day Average Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. The variable rate is based on the rate published on the 25th day, or the next business day, of the preceding calendar month, rounded to the nearest hundredth of a percent. The rate will not increase more than once per month. The maximum rate for your loan is 8.95% if your loan term is 10 years or less. For loan terms of more than 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%. Please note, we are not able to offer variable rate loans in AK, IL, MN, NH, OH, TN, and TX. Let us know if you have any questions and feel free to reach out directly to our team.


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 Apr 22, 2021 and may increase after consummation.