Parent PLUS Loan Repayment Options and Forgiveness Explained

You took out a Federal Direct Parent PLUS Loan to help your student get through college. Now, repayment falls on you—not your student.

Repayment typically begins 60 days after the loan is fully disbursed. You can request an in-school deferment to delay payments until six months after your student graduates or drops below half-time.

What’s Changing Under the One Big Beautiful Bill Act

As of July 4, 2025, the One Big Beautiful Bill Act (OBBBA) set new rules that roll in from July 1, 2026, through 2028. These rules reshape which repayment plans Parent PLUS borrowers can use and when you must act:

• IDR eligibility restriction: New Parent PLUS loans first disbursed on or after July 1, 2026 are not eligible for income-driven repayment plans, including RAP, even if consolidated later.
• Deadline windows: For Parent PLUS borrowed before July 1, 2026, consolidate to a Direct Consolidation Loan and enroll in IDR on time to preserve eligibility. Some transitions must be completed before July 1, 2028.
• Standard plan for new loans: Parent PLUS first disbursed on or after July 1, 2026 will use a standard plan only with fixed payments. No IDR or IDR-based forgiveness on these new loans.
• Plan sunsets: SAVE, PAYE, and ICR are being phased out by July 1, 2028. Check your servicer or StudentAid.gov for timing and options.

Note: Details on how RAP will operate in edge cases and how servicers process transitions are still being finalized.

Income-Contingent Repayment (ICR)

ICR is the only income-driven plan Parent PLUS can access, and only after a Direct Consolidation. The Parent PLUS loan must have entered repayment on or after July 1, 2006.

Payments are 20% of discretionary income (AGI above 100% of the federal poverty guideline). Any remaining balance is forgiven after 25 years of qualifying payments.

Public Service Loan Forgiveness

PSLF requires Direct Loans and qualifying employment while making 120 qualifying payments. For Parent PLUS, that means consolidating to a Direct Consolidation Loan and using ICR. On the standard 10-year plan, most borrowers fully repay by month 120—so PSLF rarely applies without ICR.

After July 1, 2026: New Parent PLUS loans are limited to a standard plan and cannot use IDR. Payments may technically count toward PSLF, but most borrowers will have no balance left to forgive at month 120.

Refinance or Transfer

Refinance

You can refinance Parent PLUS into a private loan to seek a lower rate. But you’ll lose federal protections, IDR, PSLF eligibility, and federal forbearance and deferment options.

Transfer to Your Child

Your child may refinance the debt into their own name with a private lender if they qualify based on credit, income, and payment history. This transfers repayment responsibility to them.

Double Consolidation Loophole (Closed)

The “double consolidation” pathway, which once let Parent PLUS borrowers access other IDR plans, closed on July 1, 2025.

Federal Plans at a Glance

If you do not use ICR or refinance, your loan will be on one of these standard plans. Here’s a quick comparison:

Extended Repayment Terms by Balance

Deferment and Forbearance

Parent PLUS loans may qualify for deferment or forbearance, generally up to three years. Interest accrues and may capitalize if unpaid. For new federal loans first disbursed on or after July 1, 2027, forbearance is limited to nine months within any 24-month period.

Bottom Line

Pick the most affordable plan you qualify for, and act before the OBBBA deadlines if you hold older Parent PLUS loans. There is no prepayment penalty, so extra payments can shorten your term and reduce interest.