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Can Parent PLUS Loans Be Transferred to a Student?

Adam Sisson
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Being stuck with Parent PLUS Loan debt for the long term can be a real burden — and for good reason.

Parent PLUS Loans often have the highest interest rate of any federal student loan option, making them difficult to pay off early. That high interest rate and additional debt can also drain your monthly finances and stall major life plans like buying a new home or finally retiring.

But how do you ditch your pricey PLUS loans faster than expected?

Here’s everything to know about transferring Parent PLUS Loans into your child’s name.

First, how is it possible to transfer PLUS loans to your child?

Transferring Parent PLUS Loans from your name to a student’s can be accomplished with a student loan refinance.

Refinancing allows you to take out a new loan from a private lender for the total amount of your student debt — including federal loans like Parent PLUS Loans and other private student loans. With refinancing, you have complete control over choosing a fresh interest rate and repayment term that works for your needs, from one of the different lenders you qualify for.

And some lenders offer an excellent extra perk — the ability to transfer your PLUS loans to a child.

When does transferring your loans make sense?

By picking a lender, such as PenFed Credit Union, that offers Parent PLUS Loan transfers, you’ll have the opportunity to completely ditch that debt immediately and conveniently.

Once the loans are out of your name, you’ll no longer be obligated to repay them. This can take a serious load off your monthly expenses as well as your credit history — freeing you up financially to pursue other life goals like a new mortgage.

The flip side is that these loans will need to be put into your child’s name, which gives them the burden of the debt instead and full responsibility to make on-time payments.

If you child has the means to successfully handle your Parent PLUS payments, this strategy can be an excellent way for them to take charge of their education and start building up a credit history.

What if my child isn’t ready to take on the debt?

You may have a student who recently graduated and hasn’t gained much job experience yet — meaning they might not have a lot of expendable cash.

If that’s the case, your child may not be ready to take on additional debt and more monthly payments. Once they see a bump in their paychecks, that could change and transferring your debt could be a more realistic possibility.

Until then, there are plenty of other reasons to refinance your high interest Parent PLUS Loans such as:

  • Scoring a much lower rate — allowing you to save substantially on interest costs over the life of your new loan.
  • Shortening your repayment term — with the added benefit of a lower rate — to pay off your debt much more quickly.
  • Lengthening your repayment term — lowing your monthly bill significantly and making your debt more manageable.
  • Merging all your federal and private student loans into one — giving you just one monthly payment to worry about.

With a good income and credit score, refinancing could be a smart solution to better manage your Parent PLUS Loans in a way that works best for your finances.

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How to transfer Parent PLUS Loans through refinancing

The most important aspect of student loan refinancing? Comparing rates, lenders, and other features — like Parent PLUS transfers — before applying.

With Purefy’s Compare Rates tool, you can quickly see your refinance offers from a variety of top lenders — all in one place with one simple form. Plus, you can check your offers as often as you’d like with no impact on your credit score.

If transferring Parent PLUS Loans to a child sounds like the right thing for you, double check the features of each lender you’re eligible for to see if it’s included. For instance, PenFed Credit Union offers this benefit, however other lenders that Purefy partners with do not.

After finding your favorite option, it’s easy to apply in under 15 minutes and take advantage of refinance benefits.

The bottom line

Refinancing your Parent PLUS Loans to transfer them into a child’s name — or simply to lower your current interest rate — can be a big deal for your finances.

The high interest of Parent PLUS Loans can spiral out of control and harm both your finances and credit, making refinancing a smart decision for many families.

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