Consolidating parent plus student loans

In order for a student loan to qualify for Public Service Student Loan Forgiveness, the borrower must make 120 payments (10 years worth) and be enrolled in one of the following repayment plans: If you are on the 10 year plan, forgiveness doesn’t do you much good, because after 10 years of payment, your loan is paid off.

The problem for Parent PLUS loan borrowers is that these loans are not eligible for IBR, PAYE or ICR.

The definition of loan consolidation in a nutshell, is this: One loan, one payment, one lender.

It’s simple, efficient and practical, but there are some negatives, not the least of which is that you could end up paying much more in interest by the time you’re finished.

Consolidation is a great option to make your payments more manageable and maybe even save some money.That means that even if you are in a public service job, payments on a Parent PLUS loan will not be helping you towards student loan forgiveness.However, there is one exception…Even if you have just one Parent PLUS loan, you can consolidate the loan into a Federal Direct Consolidation loan.This may seem silly, because consolidating the one loan doesn’t change the interest rate, it really is nothing more than a name change. Even though the consolidated loan contains a Parent PLUS loan, as a consolidated loan, it is eligible for the Income Contingent Repayment Plan.(Note: this consolidated loan will still not be eligible for the more common IBR and PAYE plans).

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