Parents In Debt For Their Child’s College Can Get Forgiveness | Personal finance
The ICR is particularly useful for older parents who, when they retire, can expect to have less income than they had when they took on the debt. After 25 years of payments, the borrowing parents will have the rest of their debt canceled.
Qualify for the Civil Service Loan Discount. The Public Service Loan Forgiveness provides the option to forgive after 120 payments while the parent is working for a qualifying nonprofit or government employer.
However, this cancellation is difficult to achieve: Analysis of federal data shows that only 1.16% of all applications have been approved by April 29, 2021. It is not known how many of these applications or approvals are PLUS borrowers.
Parent PLUS borrowers must first consolidate their loans into a direct consolidation loan and register for income-tested repayment in order to make eligible payments.
Use the closed school and the borrower’s defense. When schools suddenly close or engage in deceptive practices, student loan borrowers, including parents, are not necessarily required to repay their debt.
Under the closed schools discharge rules, if the school closes while a student is still present, some or all of the parent PLUS loans used to pay for the program would be released as part of the closed schools discharge, according to the Ministry of Education.