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

Written by Steve Rhode


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.


You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.

READ  Can We Take Over the Parent Plus Loan from Mom?

About the author

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.


  • These are truly the worst loans ever!!! The Parent PLus Loans I have for my son were done so wrong and now the college he went to closed because they ran out of money!!! I remember back when my son applied for his loans they told him, get your parent to do its cheaper!!! So that’s what I did and I got screwed!!! The only reason they told him that is they knew I would get the loan approved and they would have the money they needed!!! So unfair to us as parents who want the best for their kid. Now Ive been through cancer and have brachial plexopathy in my left arm from nerve damage caused from the 8 hour operation I had trying to beat cancer!!! I JUST WANT TO SCREAM!!!!!!!!

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