Coach Q&A: Refinancing Parent PLUS Loans
October 8, 2019

Hi, I took out Parent PLUS loans for my son’s education. I would like to refinance them so I can pay less interest. How do I do that?


If you’ve taken out Parent PLUS loans for your child’s education, you are the owner of that student loan. Sometimes parents want to transfer ownership of the loan to their child. In that case the child would have to refinance the loan. However it sounds like you would like to maintain ownership of the loan and refinance it for a lower interest rate.


Things to consider before refinancing


  • The best interest rates go to borrowers with good to excellent credit scores and high income relative to debt.


  • Refinancing completely privatizes federal student loans and makes them ineligible for benefits like income-driven repayment plans.


How to refinance your Parent PLUS loans

  • Start by exploring interest rates to ensure you can get a lower interest rate.
    • You can get interest rate estimates at several sites including the LendKey marketplace (a partner of which will show multiple offers at once as well as lenders such as Earnest, SoFi, and CommonBond. You’ll need to supply income, liability, & asset information and the site will do a soft credit pull (doesn’t show up on your credit history) to see what type of interest rates you may get offered if you decide to refinance.
    • It only makes sense to refinance if the offered interest rate is lower than your current interest rate.


  • Select one or two of the best refinancing offers and submit formal applications.
    • Formal applications do a hard credit pull and will show up as credit inquiries on your credit report.
    • Once you have formal offers from different companies you can potentially leverage the offers to generate competition. It’s an easy step to see if any of your current offers will lower and beat the competitor’s interest rate.
  • Once you’ve decided on the best offer, accept your new loan.
    • Keep making payments with your current servicer until the loans get transferred to the company you refinanced with.
    • It can take anywhere from one to three months for your loans to officially be transferred to the refinancing company.


Additional Resources

Ask Jeni: Can I Transfer my Parent PLUS Loan to my Child?