I have a Parent PLUS Loan in my name for one of my children. How can I change the loan to put it 100% in my child’s name, removing my name completely? Are there several choices? Or only a few?
The major federal benefits that would be lost by refinancing a Parent PLUS Loan are
- Eligibility for the Income-Contingent Repayment (ICR) plan which is the only income-driven repayment plan Parent PLUS loans are eligible for
- Eligibility for loan forgiveness under Public Service Loan Forgiveness (PSLF) if working in eligible employment, and eligibility for Income-Driven Loan Forgiveness.
* To switch to the ICR plan you would need to contact your student loan servicer, consolidate your loan, and complete an income-driven repayment plan application.
Borrowers who get the most competitive interest rates generally have
- A good to excellent credit score
- High income relative to student loan debt
- Must be refinancing at least $15,000 of student loan debt
- Steady and predictable income
If you and your child decide refinancing is the best option here are some ideas for getting started.
Start comparing interest rates among lenders
- You can use the Credible Marketplace in the Tuition.io wellness portal to shop for more than one interest rate at a time.
- The other option is independently going to different sites and filling out their rate estimators. The refinancing companies that typically have lowest interest rates are Earnest, ElFi, and SoFi.
- These interest rate estimators do pull a soft credit check and require a decent amount of income and asset information to give accurate estimates.
Once you have rate estimates that meet your needs it’s time to submit formal applications
- I advise borrowers to submit applications to the two companies with the lowest interest rate estimates
- The formal applications will pull a hard credit check and show up on the credit report
- Once you have official offers from the refinancing companies, I suggest getting a little competition going between companies because you may be able to squeeze out a little lower interest rate. It’s the first time student loan business is a little competitive so take advantage!