Can We Consolidate Our Parent Plus Loans and Go For PSLF?

Question:

Dear Steve,

Both my wife and I took out separate direct federal parent plus loans for our two children starting in 2010 and ending 2014. My wife loan for my daughter was 128K and I took out 150K for my son. I work in public service and my wife for private industry.

Can we consolidate both loan balances into one new loan just under my name for the full amount 278K and then I can pay through ICR, file a separate income tax return, and take advantage of the pslf and my lower income.

Thank you sincerely for any help!

Robert

Answer:

Dear Robert,

No, you can’t do that and it would be insane to do so even if you could. So many people who did that in the past, when it was permitted, are just flat out screwed now with joint liability and no way out. Divorce and death happen.

I would suggest you consolidate your loans into a Direct Loan and then opt for an income driven repayment program, like the ICR, since these are Plus loans. After 120 on-time payments under the new consolidated loan the balance could be forgiven as long as you qualify for the Public Service Loan Forgiveness program.

Your wife could consolidate her Plus loans and repay them under the 10 year plan to dispose of them as quick as possible. Actually she could do that now.

You’d have to see if there was any interest rate break if she consolidated. If the payments were unaffordable she could opt for an income driven plan. Of course lower payments equal more to be repaid over time.

Sincerly,


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.

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