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Can We Release the Cosigner on Our Parent PLUS Loans?

Written by Steve Rhode

“Dear Steve,

My husband took out several Direct Parent Plus loans for our daughter’s education (federal loans). Because his credit wasn’t the greatest my father-in-law endorsed those loans.

Now that my daughter has graduated we consolidated those loans. We only make about $60,000 a year between the two of us so we need a repayment plan with low payments.

We still have a child in college that we are also helping. First question are there any type of repayment programs or government programs for struggling parents like there are for students? Second question is when we consolidated the loans does that release the endorser from those loans?


Dear Melinda,

As far as the old Parent PLUS Loan goes, there is some good news. See my article The Best Way to Lower Parent PLUS Loan Payments for information on how to consolidate the loans into a new loan. When you do, the old loan will be paid off and the cosigner will be released. You’ll also be able to elect a new income based payment that should help you significantly.

But your statement that you already consolidated the loans is a bit odd. If you already consolidated them then the cosigner was already released and you would have already had the opportunity to lower your payment. Did you not do that when you consolidated?

This of course does not address the situation moving forward with helping your other child. But the real solution there is to make sure any college is affordable using a combination of grants, scholarships, work programs, and consider the cost of tuition when selecting a school.

The biggest mistake I see people making is selecting a school for an emotional reason and not looking at it through a cost-benefit analysis. The best question to ask is if the cost of the education in the chosen field will be able to be paid for with suitable future wages. I’ve just seen way too many people graduating with $175,000 in debt and a graphic arts degree.

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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.

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