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How Can I Settle What I Owe on Parent Plus Loan?

By on April 16, 2018


Dear Steve,

Parent Plus loan was originally taken at 23,000 now at 39,000. I am 67 and would like to make good on original loan at 23,000 but can’t afford 39,000. I’m in kind of unfair situation as I’m divorced from father and loan is in my name only.

Is there any hope for upcoming breaks for those with unmanageable Parent Plus Loans…other than those currently available? They may make more money in the long run.



Dear Jan,

A Parent Plus loan is the liability of the borrower. In this case, it appears to be you.

There is no dramatic settlement opportunity for federal student loans. However, you can:

  1. Apply for a Direct Consolidation Loan. There is no fee to do this.
  2. Elect to repay the loan using the Income Contingent Repayment (ICR) option.
  3. Under ICR your payment will be 20 percent of your discretionary income or what you would pay on a repayment plan with a fixed payment over the course of 12 years, adjusted according to your income.
  4. The repayment period is a maximum of 25 years from enrollment in the ICR.

This approach should lower your monthly payment and keep you out of default to avoid a Social Security wage garnishment. It will not eliminate the loan.

If you would like to estimate what your new payment might be, use the Repayment Estimator.

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About Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

One Comment

  1. Jan

    April 16, 2018 at 5:01 pm

    Asked question about Parent Plus loan.

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