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Student loans: how to refinance or transfer Parent PLUS loans

Student loans: how to refinance or transfer Parent PLUS loans

Student loans taken out directly by parents, also known as PLUS loans, can come with high interest rates and fees. But student loan refinancing can ease the burden of repayment once your child graduates.

  • By Brianna McGurran NerdWallet

That’s especially true if you borrowed direct Parent Loans for Undergraduate Students, also known as PLUS loans, to cover part of your child’s college costs. These federal loans come with high interest rates and fees.

But there’s a way to ease the burden of repayment once your child graduates: student loan refinancing. There are two methods of refinancing a PLUS loan:

  1. You, the parent borrower, can refinance the loan in your name.
  2. Your child can refinance the loan in his or her name and take on the repayment responsibility.

You or your child will lose some borrower protections by refinancing, and your child must be financially secure enough to qualify solo.

Here’s how to refinance or transfer parent PLUS loans, and what to weigh as you come up with an action plan.

Option No. 1: Refinance a parent PLUS loan in your name

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PLUS loan interest rates are set by Congress, and they’re typically higher than the rates on other federal student loans. Read more