{"id":8415,"date":"2024-11-23T09:38:44","date_gmt":"2024-11-23T09:38:44","guid":{"rendered":"https:\/\/finderica.com\/im-struggling-to-pay-back-a-parent-plus-student-loan-i-took-out-for-my-children-am-i-eligible-for-forgiveness\/"},"modified":"2024-11-23T09:38:44","modified_gmt":"2024-11-23T09:38:44","slug":"im-struggling-to-pay-back-a-parent-plus-student-loan-i-took-out-for-my-children-am-i-eligible-for-forgiveness","status":"publish","type":"post","link":"https:\/\/finderica.com\/?p=8415","title":{"rendered":"I\u2019m struggling to pay back a Parent PLUS student loan I took out for my children. Am I eligible for forgiveness?"},"content":{"rendered":"\n
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\"Dana<\/p><\/div>\n

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\"ScoreCard<\/p>\n

Dear Penny,<\/span><\/p>\n

I\u2019ve been repaying $200,000 Parent PLUS student loan debt for my two children for over 10 years on an income-driven plan. People, including my accountant, told me to look into filing for forgiveness. Does this pertain to me as a parent?<\/span><\/p>\n

I\u2019m going to be 72 in August, still working two jobs, and my husband passed away a year ago, leaving me without his income to support my bills. I can\u2019t retire because of these loan payments. Is there something that can be done now that my income is substantially lower?<\/span><\/p>\n

The income-driven plan feels like a loan shark. The interest is 7.64% \u2014 does the government need to make such a substantial profit? I\u2019m only paying monthly minimums, so I actually owe more than I borrowed! It\u2019s very disheartening that I won\u2019t have these loans paid off until 2042 \u2014 I\u2019ll be 91! If I pass away first, are the loans forgiven?<\/span><\/p>\n

\u2014 Will My Debt Die With Me?<\/span><\/p>\n<\/div>\n

Dear Will,<\/p>\n

Folks are giving you incorrect information, but with seeds of reality.<\/p>\n

Federal Parent PLUS loans would go into a repayment plan called Income-Contingent Repayment<\/a> (ICR), which sets your monthly payment at up to 20% of your discretionary income. You\u2019ll be eligible to apply for forgiveness of any remaining balance after making monthly payments for 25 years. The loans would also be discharged if you die;<\/a> your family would have to provide your servicer with proof of death.<\/p>\n

(Your sources might be conflating your options with Public Service Loan Forgiveness, which has gotten a lot of headlines this year. Loans in that program are eligible for forgiveness after 10 years.)<\/p>\n

You should be able to get lower monthly payments by reporting your reduced income to your student loan servicer. You can find your loan servicer through StudentAid.gov<\/a>. Income-driven plans are meant to eliminate the burden of high monthly payments, so if the debt is a strain, something probably needs to change about your plan.<\/p>\n

A final note: The federal government doesn\u2019t actually make a profit off of student loans. The interest we pay is used to cover the costs of administering loan programs \u2014 i.e. private loan servicers. With recent pandemic-era complexities, student loan programs have indeed cost our government money<\/a> rather than generated revenue.<\/p>\n

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Dana Miranda is a Certified Educator in Personal Finance\u00ae and author of YOU DON\u2019T NEED A BUDGET. She writes <\/em>Healthy Rich<\/em><\/a>, a newsletter about how capitalism impacts the ways we think, teach and talk about money.<\/em><\/p>\n

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