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How to Calculate Your Parent PLUS Refinancing Savings

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Before You Read, Lower Your Student Loan Payment

It’s that quick & easy — really. Our free tool checks a network of top refinance lenders and shows you options in one easy chart.
Checking rates takes 2 minutes with no impact on your credit
Federal & private loans are eligible
No maximum loan amount

Before You Read, Lower Your Student Payment

It’s that quick & easy — really. Our free tool checks a network of top refinance lenders and shows you options in one easy chart.

Checking rates takes 2 minutes with no impact on your credit
Federal & private loans are eligible
No maximum loan amount

As a parent, you may have helped your child pay for some or all of their college expenses. According to a 2018 study, 56% of parents are saving for their children’s college education. But with rising education costs, you may have turned to student loans to help pay for your child’s tuition and fees.

While there are limits on how much undergraduate students can take out in federal student loans, parents aren’t subject to those same rules. With Parent PLUS Loans, families can borrow up to the total cost of attendance. While that can help you cover the remaining costs, the lack of restrictions has led to a steep increase in the number of parents with student loan debt.

As of the third quarter of 2020, approximately 3.5 million borrowers had taken out over $98.3 billion in outstanding Parent PLUS Loans. That’s a 31% increase in outstanding debt from just five years ago, when 3.3 million Parent PLUS Loan borrowers owed just $71.1 billion.

If you have education debt that you took out for your child’s schooling, you may be wondering how to pay them off faster. For many, Parent PLUS Loan refinancing can be a smart way to save money and accelerate your debt repayment. Here’s how it works.

How Parent PLUS Loan refinancing can save you money

While federal student loans typically have low interest rates, that’s not the case with Parent PLUS Loans. They have the highest interest rate of any federal student loan.

Loans disbursed after July 1, 2020 and before July 1, 2021 have an interest rate of 5.30% — nearly double the rate of undergraduate Direct loans. But if you took out loans prior to July 1, 2020, your interest rate is a whopping 7.08%.

With such a high rate, it can be difficult to make progress paying down your debt. Over the length of your repayment term, you could pay thousands in interest charges, and your parent loans can hurt your finances.

That’s why refinancing your loans can make so much sense. With Parent PLUS Loan refinancing, you may qualify for a lower interest rate, allowing you to save a significant amount of money over the life of your loan.

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5.19% – 9.74% APR 2

Variable Rate

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How to calculate your Parent PLUS Loan refinancing savings

To show you how effective Parent PLUS Loan refinancing can be, consider these three examples.

1. Refinancing with a 10-year term

Lisa took out $30,000 in student loans for her daughter’s college education and has an interest rate of 7.08% with a 10-year term. She decides to refinance her loan, but wants to keep the same repayment term.

Lisa has good credit, and qualifies for a 10-year loan at 5.00% interest. By refinancing her Parent PLUS Loans, Lisa saves over $3,700.

 Original Loan Refinanced Loan
Loan Balance$30,000$30,000
Loan Term10 Years10 Years
Interest Rate7.08%5.00%
Total Interest$11,948$8,184
Total Repaid$41,948$38,184
Total Savings: $3,764

2. Refinancing six-figures of debt

If you have a high loan balance, you may be wondering, “Should I refinance Parent PLUS Loans?” While so much debt can be overwhelming, refinancing six-figures of student loans can help you save thousands.

For example, Jerry took out $100,000 in student loans with a 10-year repayment term at 7.08% interest. Like Lisa, he is able to refinance and qualify for a 10-year loan at just 5.00% interest. By refinancing his debt, he saves over $12,000.

 Original Loan Refinanced Loan
Loan Balance$100,000$100,000
Loan Term10 Years10 Years
Interest Rate7.08%5.00%
Total Interest$39,825$27,279
Total Repaid$139,825$127,279
Total Savings: $12,547

3. Refinancing with a shorter repayment term

The lowest-advertised student loan refinancing rates are reserved for applicants with excellent credit who opt for shorter loan terms. If you’re willing to shorten your repayment period to five to eight years, you can qualify for a lower rate and save even more money.

For example, Carl originally had $50,000 in student loans with a 10-year repayment term and a 7.08% interest rate. By refinancing his loans, he qualified for a five-year loan at 3.75%.

Though refinancing caused his payment to increase, the savings make it worth it. Because he selected a shorter term, he was able to save $15,000.

 Original Loan Refinanced Loan
Loan Balance$50,000$50,000
Loan Term10 Years5 Years
Interest Rate7.08%3.75%
Total Interest$19,913$4,912
Total Repaid$69,913$54,912
Total Savings: $15,001

Other Parent PLUS Loan refinancing benefits

While refinancing parent student loans can help you save money, refinancing offers other benefits, too.

1. You can reduce your monthly payment

When you refinance your loans, you can reduce your interest rate or decide to lengthen your repayment term. With either approach, you can lower your monthly payments, freeing up more money for your monthly expenses.

2. You can lower your debt-to-income ratio

When you apply for a loan or credit card, lenders look at your debt-to-income ratio (DTI) when evaluating your application. Your DTI is the amount of debt you have relative to your income. The higher your minimum monthly payments, the worse your DTI, making it difficult to qualify for mortgages, car loans, or even credit cards.

By refinancing your loans, you can lower your monthly payment and improve your DTI. If you’re looking to buy a new home or take out a loan for renovations, a lower DTI can help you qualify for a loan and get a better interest rate.

3. You can pay off your debt faster

If you’re researching how to pay off Parent PLUS Loans as quickly as possible, refinancing can be a useful tool. When you refinance, you can get a lower interest rate. With a lower rate, more of your extra payments go toward the loan principal rather than interest charges, helping you pay down the balance faster. Once the debt is eliminated, you’ll have money to pursue other financial goals, such as saving for retirement.

Compare parent loan refinancing rates

If you’re not sure how to refinance Parent PLUS Loans, you may be surprised at how easy it is. With most lenders, you can submit a loan application online and get approved within minutes. However, it’s a good idea to shop around and compare Parent PLUS Loan refinancing rates before choosing a lender.

You can use Purefy’s Compare Rates tool to get quotes from top refinancing lenders in minutes, without damaging your credit score.

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Ascent Rate Disclosure

Ascent’s undergraduate and graduate student loans are funded by Bank of Lake Mills or DR Bank, Member FDIC. Loan products may not be available in certain jurisdictions. Certain restrictions, limitations; and terms and conditions may apply. For Ascent Terms and Conditions please visit: www.AscentStudentLoans.com/Ts&Cs.

Rates are effective as of 12/1/2023 and reflect an automatic payment discount of either 0.25% (for credit-based loans) OR 1.00% (for undergraduate outcomes-based loans). Automatic Payment Discount is available if the borrower is enrolled in automatic payments from their personal checking account and the amount is successfully withdrawn from the authorized back account each month. For Ascent rates and repayment examples please visit: www.AscentStudentLoans.com/Rates.

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SoFi Rate Disclosure

3 SoFi Rate Disclosure:

Fixed rates range from 4.49% APR to 8.99% APR with a 0.25% autopay discount. Variable rates from 5.09% APR to 8.99% APR with a 0.25% autopay discount. Unless required to be lower to comply with applicable law, Variable Interest rates on 5-, 7-, and 10-year terms are capped at 8.95% APR; 15- and 20-year terms are capped at 9.95% APR. Your actual rate will be within the range of rates listed above and will depend on the term you select, evaluation of your creditworthiness, income, presence of a co-signer and a variety of other factors. Lowest rates reserved for the most creditworthy borrowers. For the SoFi variable-rate product, the variable interest rate for a given month is derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR index increases. The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. This benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. The benefit lowers your interest rate but does not change the amount of your monthly payment. This benefit is suspended during periods of deferment and forbearance. Autopay is not required to receive a loan from SoFi.

ISL Rate Disclosure

Earnest Rate Disclosure

2 Earnest Rate Disclosure:


Actual rate and available repayment terms will vary based on your income. Fixed rates range from 5.44% APR to 9.99% APR (excludes 0.25% Auto Pay discount). Variable rates range from 5.97% APR to 9.99% 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. Our lowest rates are only available for our most credit qualified borrowers and contain our .25% auto pay discount from a checking or savings account.

Advertiser Disclosure:

THIS IS AN ADVERTISEMENT. YOU ARE NOT REQUIRED TO MAKE ANY PAYMENT OR TAKE ANY OTHER ACTION IN RESPONSE TO THIS OFFER.

Earnest Rate Disclosure

Rates displayed include the 0.25% Auto Pay discount. You can take advantage of the Auto Pay interest rate reduction by setting up and maintaining active and automatic ACH withdrawal of your loan payment from a checking or savings account. The interest rate reduction for Auto Pay will be available only while your loan is enrolled in Auto Pay. Interest rate incentives for utilizing Auto Pay may not be combined with certain private student loan repayment programs that also offer an interest rate reduction. For multi-party loans, only one party may enroll in Auto Pay. It is important to note that the 0.25% Auto Pay discount is not available while loan payments are deferred.

Actual rate and available repayment terms will vary based on your income. Fixed rates range from 4.67% APR to 16.15% APR (excludes 0.25% Auto Pay discount). Variable rates range from 5.64% APR to 16.45% APR (excludes 0.25% Auto Pay discount). Earnest variable interest rate student loan origination 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. Although the rate will vary after you are approved, it will never exceed 36% (the maximum allowable for this loan). Please note, Earnest Private Student Loans are not available in Nevada. Our lowest rates are only available for our most credit qualified borrowers and contain our .25% auto pay discount from a checking or savings account. It is important to note that the 0.25% Auto Pay discount is not available while loan payments are deferred.

Nine-month grace period is not available for borrowers who choose our Principal and Interest Repayment plan while in school.

Earnest clients may skip one payment every 12 months. Your first request to skip a payment can be made once you’ve made at least 6 months of consecutive on-time payments, and your loan is in good standing. The interest accrued during the skipped month will result in an increase in your remaining minimum payment. The final payoff date on your loan will be extended by the length of the skipped payment periods. Please be aware that a skipped payment does count toward the forbearance limits. Please note that skipping a payment is not guaranteed and is at Earnest’s discretion. Your monthly payment and total loan cost may increase as a result of postponing your payment and extending your term.

Loan Eligibility criteria: Eligible students must: 1) For college Freshmen, Sophomores and Juniors, attend, or be enrolled to attend, a Title IV school full-time. For college Seniors and Graduate students, attend, or be enrolled to attend, a Title IV school at least half-time; and 2) be pursuing a Bachelor’s or Graduate degree. Earnest private student loans are subject to credit qualification, completion of a loan application, verification of application information, self-certification of loan amount, and school certification.

Responsible borrowing tip: Explore all scholarship, grant and federal options before applying for a private loan.

Earnest Private Student Loans are made by One American Bank, Member FDIC. One American Bank, 515 S. Minnesota Ave, Sioux Falls, SD 57104.

Earnest loans are serviced by Earnest Operations LLC, 535 Mission St., Suite 1663 San Francisco, CA 94105, NMLS #1204917, with support From Navient Solutions, LLC (NMLS #212430). One American Bank and Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by agencies of the United States of America.

Advertiser Disclosure:

THIS IS AN ADVERTISEMENT. YOU ARE NOT REQUIRED TO MAKE ANY PAYMENT OR TAKE ANY OTHER ACTION IN RESPONSE TO THIS OFFER.

ELFI Rate Disclosure

4 ELFI Rate Disclosure:

Education Loan Finance is a nationwide student loan debt consolidation and refinance program offered by Tennessee based SouthEast Bank. ELFI is designed to assist borrowers through consolidating and refinancing loans into one single loan that effectively lowers your cost of education debt and/or makes repayment very simple. Subject to credit approval. See Terms & Conditions. Interest rates current as of 10/13/2023. The interest rate and monthly payment for a variable rate loan may increase after closing, but will never exceed 9.95% APR. Interest rates may be different from the rates shown above and will be based on the term of your loan, your financial history, and other factors, including your cosigner’s (if any) financial history. For example, a 10-year loan with a fixed rate of 6% would have 120 payments of $11.00 per $1,000 borrowed. Rates are subject to change.

ELFI Rate Disclosure

Education Loan Finance is a nationwide student loan provider offered by Tennessee based SouthEast Bank. ELFI is designed to assist students financially with receiving their education. Subject to credit approval. See Terms & Conditions. Interest rates current as of 12/11/2023. Variable interest rates may increase after closing but will never exceed 18.00%. Interest rates may also differ from the rates shown above. The term of your loan, financial history, and other factors, including your cosigner’s (if any) financial history can affect the interest rate. For example, a 10-year loan with a fixed rate of 7% would have 120 payments of $11.61 per $1,000 borrowed. Rates are subject to change.

College Ave Rate Disclosure

College Ave Student Loans products are made available through Firstrust Bank, member FDIC, First Citizens Community Bank, member FDIC, or M.Y. Safra Bank, FSB, member FDIC.. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
Rates shown include autopay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. If a payment is returned, you will lose this benefit. Variable rates may increase after consummation.
Minimum loan amount $1,000, as certified by your school and less any other financial aid you might receive.
This informational repayment example uses typical loan terms for a freshman borrower who selects the Deferred Repayment Option with a 10-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 8.35% fixed Annual Percentage Rate (“APR”): 120 monthly payments of $179.18 while in the repayment period, for a total amount of payments of $21,501.54. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.
Information advertised valid as of 1/1/2024. Variable interest rates may increase after consummation. Approved interest rate will depend on the creditworthiness of the applicant(s), lowest advertised rates only available to the most creditworthy applicants and require selection of full principal and interest payments with the shortest available loan term.

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