If you or your child that benefited from your Parent PLUS loan dies, then the loan could qualify for a borrower death discharge. Usually the loan servicer has to be given a written statement by the court saying that the borrower has died. The statement also states that the estate does not have the right to collect any monies from the estate. The document is called a ‘certificate of death.’ There are exceptions to these requirements and if your loan carries one of them then your loan will not be dischargeable.
The basic purpose of parent plus loan forgiveness programs is to encourage responsible use of federal education loans by borrowers. These programs are also available to other government or college loans. Most borrowers who have eligible PLUS loans qualify for this program. But, if you fall within the above criteria, then you may want to consider a different type of financial aid program. Here are several options.
One option is to find other means of paying off your debt. You may have exhausted all available means of deferment, forbearance, and/or forbearance. If this is the case, then you may want to explore other repayment assistance programs. For most people, parent plus loan forgiveness programs are pretty good because they can help parents fulfill their obligation to repay.
Another option is to seek a new Direct Consolidation Loan. You need to be employed in a position which allows you to receive a Direct Consolidation Loan and still qualify for program participation. To be eligible for this program you must work at a company that participates in the Department of Education’s Direct Loan Consolidation Loan program. As part of its eligibility requirements, the company should have a working agreement with the Department of Education. Most eligible companies will be those that have not received a waiver from the Department of Education, and also cannot be the subject of a court order or an involuntary bankruptcy filing.
While direct consolidation loan forgiveness does not automatically apply to a parent PLUS loan, it may be worth looking into. If you consolidate your federal student loan payments into one payment, you qualify for lower interest rates. The Direct Consolidation Loan Servicer will work with the companies that qualify to provide you this lower interest rate. However, you may not want to consolidate just one payment when you can qualify for a lower interest rate. You may also be able to consolidate multiple loans into one payment by using a lower interest rate.
You may want to look at private sector sources of funding to help you with your college loan debt. You do not qualify for program participation unless you have sufficient income to repay the loan debt. This is one of the ways that private sector sources can help you qualify for program participation. Many private lenders participate in federal programs that provide funding to help student loan debtors repay their parent plus loans.
When you find that you are eligible, applying for federal student loan forgiveness. If you have a cosigner who has an active student loan, he or she must also qualify. In order to receive the same benefits as the borrower, the cosigner must agree to repay the loan in full. Once the borrower qualifies for direct plus loans, the borrower may begin repayment on his or her parent’s behalf without the need of a cosigner.
The federal income-driven repayment plan requires the borrower to have an acceptable income and employment. A borrower must meet certain income and/or employment requirements. If an income-driven repayment plan is used for parent plus loans, a borrower may not be able to use the forgiven funds for another purpose if the funds are used for direct PLUS loans. However, a borrower may be able to obtain a federal loan with no cosigner.