Parent PLUS Loan Repayment Strategies

As a parent, you want to do everything you can to help your child succeed. If you took out a federal Direct PLUS Loan to help cover your child’s college costs, you may be balancing these payments with those for your own student loans. If you are concerned about managing student loan and Direct PLUS Loan repayments, a Citizens Bank Education Refinance Loan® may be able to help. You can use this product to refinance your existing college loans, which may reduce your monthly payments and simplify your payment schedule. While a parent and child cannot consolidate their loans together, your child can apply separately for an Education Refinance Loan to help manage their debt. Use this guide to learn more about Direct PLUS Loan repayment options and why refinance may be a smart choice.

Refinancing may simplify the Parent PLUS Loan repayment process

When your child’s federal student loans enter repayment, they can consolidate those loans through the Direct Consolidation Loan program and select from a range of repayment options, including income-based repayment plans. The Parent PLUS Loan is not eligible for income-based repayment; however, parents who consolidate their PLUS Loan(s) with the federal government may be eligible for an income-contingent repayment plan that uses the borrower’s income and family size, as well as the total amount of the consolidated loan, to calculate monthly payments.


While this may help borrowers that only need to manage a Direct PLUS Loan, the situation becomes more complicated if you are making payments on your own student loans as well. Borrowers in this situation can consolidate their Direct PLUS Loan(s) with their own student loans, but in doing so they waive their right to any benefits or features that would have been available on their existing loans. This is especially important with federal loans, which offer some forgiveness and repayment options that private loans do not. Some experts recommend consolidating Parent PLUS Loans separately from other student loans to avoid this issue, but this still leaves borrowers with two separate payments each month. In contrast, one of the benefits of refinancing your Direct PLUS and student loans with Citizens Bank is the ability to combine your college loans and potentially achieve one lower monthly payment.

Refinance Parent PLUS Loans for a better interest rate

Like other federal student loans, the interest rates for Direct PLUS Loans are set by Congress. If you decide to consolidate your student and/or Direct PLUS loans through the federal government, your new interest rate will be based on the weighted average of the loans you are combining. Federal student loan interest rates tend to be higher than private student loans - because of this, consolidating your federal student loans through the government may result in a comparatively higher interest rate.


If you choose to consolidate or refinance your Direct PLUS Loans or student loans with Citizens Bank, your new interest rate will be based on your credit score. If you have a strong credit score, an Education Refinance Loan may help you lower your interest rate, which could in turn lower your monthly payments and save you money over the life of your loan. You can learn more about the benefits of refinancing by calling 1-888-411-0266 and speaking with one of our Student Lending Specialists.


Helpful Tools & Information
Refinance Loan Glossary An easy-to-use guide for the terms you’ll encounter in the student loan process.
FAQs Answers to frequently asked questions about the Education Refinance Loan.
Loan Refinance Estimator Use our Refinance Estimator to see how much you could potentially save.