Dear Student Loan Hero,
I have a parent PLUS loan I’d like to refinance, but when I look at the list of lenders on Student Loan Hero, they all seem to require my child to be a graduate from a certain school. My child does have a BS, but it’s from a school that’s not on the list. Why is this? Do I have other options?
Dear Student Loan Borrower,
When it comes to refinancing student loans, some lenders require that the loans you used went to a Title IV school. If your child’s school isn’t on a lender’s list of eligible schools, they might not have attended a Title IV school.
This designation was established by the Higher Education Act of 1965 to set standards for which schools’ students can receive federal financial aid, including low-interest loans and work-study programs. Public, private, for-profit and vocational schools can all become Title IV institutions.
You can check if your child attended a Title IV school by looking on the Federal Student Aid website. If your school is Title IV, reach out to the lenders and find out why it isn’t on their list of eligible schools for student loan refinancing. And if the school is not covered by Title IV, it could still be worth reaching out to these lenders to see if they’ll make an exception.
Although online lenders such as SoFi, CommonBond, and Earnest are pretty strict in requiring that a loan was used at a Title IV school, other lenders might be more lenient. So reach out to a few directly to see if any will work with you.
In fact, shopping around is a good idea any time you’re refinancing loans, as this process can ensure you find your best terms and lowest rates. If you can’t find a lender that will work with you, you might need to consider alternative strategies for managing your parent PLUS loan.
If you need to lower your monthly payments, for instance, you could put your parent PLUS loan on an income-contingent repayment plan (ICR). This will adjust your payments to 20% of your discretionary income and extend your term to 25 years.
If you still have a balance after those 25 years are up, you may be able to get the remainder of the debt forgiven. Unlike loans made to students, though, you’ll need to consolidate your parent PLUS loan before it’s eligible for ICR. You can complete the consolidation process on StudentLoans.gov.
Hopefully, you’ll find a lender who will refinance your parent PLUS loan, even if it wasn’t used at a Title IV school. Through refinancing, you could adjust your monthly payments and choose a new repayment term that lines up with your goals.
But if you can’t qualify, investigate alternative options from the federal government. By exploring all avenues, you can find a repayment plan for your parent PLUS loan that works for you.
I hope this helps, and I wish you the best of luck with your parent PLUS loan. I’ll be crossing my fingers for you!
Student Loan Hero
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