However, from 2006 to 2013, the rate for Parent PLUS loans was 7.9%.
The lender pays off the original government loan, so the parents are no longer liable.
The child then gets a private loan from the lender.
Variable rates, of course, are usually lower, but there can be very worthwhile savings with fixed rates also.
Let’s say you have a loan balance of ,000 at 7% interest.
If you refinance at a new interest rate of 3% with a 10-year term, you can save ,383 and lower your monthly payment by per month.
Parents are not permitted to transfer Parent PLUS loans directly to their child.Once their child is out of school, parents may look forward to paying off their house, saving more for retirement or just spending just a bit more on themselves for little luxuries.Refinancing, wherein the parents’ names or the child’s, can help decrease payments and free up money for other uses.A PLUS loan is a federal loan that graduate students, or parents of dependent undergraduate students, can borrow to pay for college or a career school. A Parent PLUS loan is one that parents take out to put their undergraduate child through school. At some point, parents may want to refinance Parent PLUS loans. Department of Education makes Direct PLUS Loans to eligible borrowers through schools participating in the Program. If the parent takes out a Parent PLUS loan, they are the responsible party, and the child has no obligation to repay it.Under an Income-Contingent Repayment plan, the amount of your payments is calculated in relation to your income.