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Parent PLUS Loan Repayment for Borrowers on Social Security

Repayment of student debt is difficult if you are living on social security. However, low payments and student loan forgiveness are both possibilities.

Written By: Michael P. Lux, Esq.

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The number of senior citizens with student loan debt, particularly from Parent PLUS loans, is increasing rapidly. In fact, it is one of the fastest-growing segments of student loan borrowers. Many seniors fear that Parent PLUS loans will deplete the social security checks on which they survive.

Some seniors face huge bills and must make major sacrifices. Others, despite their best efforts, find their social security checks garnished due to student loans.

There is good news for student loan borrowers living on social security. If they take the right steps, it’s quite possible that they may never have to make another student loan payment.

Income-Driven Repayment Plans for Parent PLUS Borrowers

One major advantage to federal student loans is the availability of Income-Driven Repayment (IDR) plans. The significance of an IDR plan is that it allows borrowers to make payments based upon what they can afford rather than what they owe. For many borrowers, this means they could potentially qualify for payments as low as $0 per month.

IDR payments are calculated by determining the borrower’s discretionary income. The higher the discretionary income, the higher the monthly bill is.

Without going into the full details on discretionary income calculations, borrowers who live on social security and have no other income will likely qualify for a $0 per month payment.

However, there is a catch with Parent PLUS loans: they are not directly eligible for any federal income-driven repayment plans. Fortunately, there is a workaround. Borrowers can convert Parent PLUS loans into eligible loans by going through federal direct consolidation. After consolidation, Parent PLUS loans become eligible for the income-contingent repayment (ICR) plan.

ICR is not the best income-driven repayment plan, but it is the only option available for Parent PLUS loans. The important part to know is that ICR is eligible for $0 monthly payments.

Parent PLUS Loans vs. Other Federal Loans: Parent PLUS loans are different than other kinds of federal student loans. Borrowers living on social security who have other federal loans have more options and flexibility in repayment.

Federal Direct Consolidation

We will skip the history lesson on federal student loans that explains why federal direct consolidation is necessary for the ICR plan. This extra step is government red tape at its worst, but thankfully the consolidation process is pretty simple.

The Direct Consolidation Loan Application is available through the Department of Education’s student loan website. According to the Department of Education, it takes about 30 minutes to complete the application.

They do a nice job explaining the process, but a couple of essential details are worth highlighting:

  1. Even if you have just a single Parent PLUS loan, you can still consolidate the loan.
  2. Do not consolidate Parent PLUS loans with other federal student loans – the other federal loans lose their eligibility for certain repayment plans if combined with a Parent PLUS loan.

A Warning About ‘Help’ with Consolidation: There have been services that have popped up over the years, offering to help borrowers go through the consolidation process to get $0 per month payments.  These “services” are usually shut down fairly quickly by the government. Most are nothing more than a scam. Borrowers shouldn’t pay for outside help to consolidate and enroll in an income-driven repayment plan.

Three Steps for $0 Student Loan Payments for Social Security Recipients with Parent PLUS Loans

Step #1: Apply for federal direct consolidation.

Visit the direct consolidation website and fill out the form. Be sure that Parent PLUS loans do not get combined with other types of federal student loans (if you also have other federal loans). If you get confused or need help, contact your federal student loan servicer for guidance.

Step #2: Sign up for an Income-Driven Repayment (IDR) Plan

For borrowers with Parent PLUS loans, the only IDR plan that they will be eligible for is ICR. Borrowers can submit IDR applications on the Studentloans.gov website. The easiest way to verify your income is to have them automatically pull your most recent tax return. However, if your income has dropped since your last tax return, you may want to submit alternative documentation.

Step #3: Certify income every year

Your student loan servicer should remind you each year, but it is important to certify your income each year. This will keep payments low and manageable. If the monthly payment suddenly jumps up, it is likely because you missed a certification deadline. If that happens, complete the IDR request again.

How does the loan get paid off with $0 payments?

If you are making $0 monthly payments, the loan balance will only grow. Though unfortunate, it is the only option for many senior citizens on the fixed income of social security.

There are provisions to have the loans forgiven after 25 years, but the reality for many seniors is that they will certify their income yearly and never make any payments on the loan.

Estate Planning Concerns

For those worried about their federal student loans persisting after their death, there is reassuring news.

A fundamental feature of all federal student loans is that the debt is extinguished upon the borrower’s death. This means that if you pass away with an outstanding student loan balance, the government will not seek repayment from life insurance payouts or any inheritance you leave behind for your children.

The death discharge process is fairly straightforward and designed to prevent additional burdens on the borrower’s family.

Digging Deeper: Learn how to manage student debt during your retirement.

Dealing with Parent PLUS loans and Living on Social Security

The steps required for Social Security recipients to ensure their checks don’t get garnished is probably more complicated than necessary. Fortunately, jumping through a bit of government red tape will address the issue.

To make sure that steps don’t get missed, it is a good idea to have your child remind you of deadlines and help you with the paperwork. Given that you took out the loan to pay for their school, it is the least they can do.

About the Author

Student loan expert Michael Lux is a licensed attorney and the founder of The Student Loan Sherpa. He has helped borrowers navigate life with student debt since 2013.

Insight from Michael has been featured in US News & World Report, Forbes, The Wall Street Journal, and numerous other online and print publications.

Michael is available for speaking engagements and to respond to press inquiries.

33 thoughts on “Parent PLUS Loan Repayment for Borrowers on Social Security”

  1. Hi, Michael

    You provided a very helpful answer to an inquiry I sent to you last fall, so thank you for that. I did have one follow-up I hope you can answer.

    You have indicated that people who live exclusively on Social Security likely would have a $0 payment on their student loans. (I have a direct consolidation loan in ICR status.) Would DOE also regard income my wife receives from the Teachers Retirement System of Georgia in the same way? I know that if we file jointly, both sources are considered part of the AGI. Taken together, those sources account for 80% of our total income – the rest coming from my freelance writing and interest from her investment account.

    Would it also make sense to ask anybody at DOE about this, either at Federal Student Aid or some other sub-agency?

    • Hi Ray,

      I’m glad I was helpful last time around. Hopefully I can be helpful this time too.

      Unfortuantely, I don’t think you will like my answer on this one.

      If the income your wife receives is included on your AGI (and I’m taking your word for this one as I’m not a tax expert), then her income will be used in the payment calculations if you file jointly.

      I’m also not sure of what you could ask of the people at the Department of Education or Federal Student Aid as the rules on this issue are pretty clear.

      However, there is one potential work around. You could file your taxes seperately. This may potentially increase your tax bill, but it might not. I’d encourage you to discuss this option with your tax preparer. Alternatively, if you file your taxes yourself, take the time to cacluate your tax bill both ways. If filing seperately saves you a great deal of money on student loans, but the tax bill is only slighlty higher or it is the same, you have your answer. Many couples end up using this option.

  2. Hi, Michael

    I have a Direct Consolidation loan – consolidated from two federal Parent PLUS loans and an unsubsidized federal loan – which has been in forbearance since 2019, has an ICR plan, and has an outstanding balance of almost $84,000. The servicer, since April 4 of this year, has been Nelnet.

    Next April, I can apply for renewed deferment; otherwise, on June 22, automatic $907 monthly withdrawals resume – which I can’t afford to pay.

    Every month, my wife and I receive Social Security ($2,202 mine, $110 hers) and she gets $3,048 from our state’s Teacher Retirement System. As a semi-retired freelance writer, I make an uncertain and sporadic income, which will gross about $10,000 in 2023.

    For tax purposes, it may be very advantageous for us to file jointly in 2023 for the first time, but I’m concerned my wife’s unearned income may be counted by the DOE against my loan repayment obligation.( I didn’t know her when I obtained the original loan, nor were we married when I consolidated it.)

    So, do you think I have a chance of receiving a continued forbearance next year or, failing that, can I obtain a lower-cost loan or even negotiate a good-faith repayment of a small portion of my monthly bill – say a quarter to a third of it?

  3. The department of Ed says that “the icr plan is being sunsetted except for consolidated pp. On July 1, 2024”. They state that this does not apply to consolidated parent plus loans and “icr will still be available indefinitely for consolidated pp loans. Do they mean graduate plus loans inclusivly in this reference to pp loans? Specifically, will I be able to take out a graduate plus loan next year and later convert it to a consolidated loan eligible for icr repayment? Thank you for your invaluable assistance.

      • I don’t currently have any parent plus loans. additional to the other loans that i will be accepting for graduate school that will be eligible for the SAVE payment plan i will also be taking out ineligible graduate plus loans. Will my graduate plus loans once converted into a consolidated loan continue to be eligible for the icr repayment plan as they state parent plus loans will be after the jul 1, 2024 sunseting of the program for other barrowers ?

  4. Hi Michael,
    I have a parent plus loan that was consolidated pre pandemic and put in an Income driven repayment plan. I’m currently about to restart payments at the prior rate. Come July of 2024, my loan servicer has indicated my new payment may be $500 per month with out any regard to discretionary income only gross income. They also indicated I don’t qualify for the SAVE program. How do I qualify for low payments based on discretionary income?

  5. If I want to consolidate my Parent Plus Loans and go off of income since I am 65 and get Social Security, do I have to include my husband’s income?

      • Thank you so much for your response. Is it always best to consolidate Parent Plus loans. I have a total of 4 for my son’s 4 years of education. I am the sole signer on the Parent Plus loans. I am soon to be 66, get Social Security and work a small part time job. Thank you in advance.

  6. I am presently filing for social security disability income insurance. if thats approved but i still have a pension from previous employer, do i still have to pay parent plus student loans?

  7. Hello Michael,

    Is the process of requesting the Income Contingent payment the same if I already have parent plus loans consolidated? I am trying to mentally prepare for my retirement which will mostly be from SS.

  8. Hello Michael – Do you have any information on the Savi loan support service? This service is being offered through AARP as a loan support service.

    • Hi Bill,

      I have limited information on Savi. The AARP partnership definitely lends some credibility, and I know they advertise an automated student loan guidance service, which could be very helpful if done right. However, I’m troubled by the “Up to $20,000 forgiveness… check eligibility”. This is in reference (I suspect) to the one-time forgiveness program announced by President Biden. Right now, it is held up in the courts, and nobody is eligible, and they are not taking applications. That hopefully will change, but it always gives me pause when a private company uses free federal programs as a sales pitch… especially when that program is in limbo.

  9. Hello Michael,

    If I already have consolidated loans, can I still get an income contingent payment plan when I retire and go on social security?

  10. Hello Michael – Thank you for publishing all of this great information. I am just retired and will have majority of my income be social security. I have Parent Plus and Direct student loans. Can I consolidate both of those loan types in order to qualify for the ICR plan?

    • Hi Bill,

      Thanks for the kind words.

      Consolidating everything together is an option, and you would qualify for ICR. However, I’d suggest consolidating the Parent PLUS loans into one consolidation loan. If you want, you could also consolidate your other loans into a separate loan. You loan servicer can talk you through the process.

      I suggest not mixing your Parent PLUS loans with your direct loans because it will limit the repayment options for the direct loan debt.

  11. I am a 42 year old single mom on ssi that signed a parent plus loan for my daughter under the impression I was simply helping but not taking on full responsibility for the loan. I mean how could I even be considered to even make enough to on ssi to be approved, I was confused. I’d never dealt with anything like this and honestly I simply didn’t understand. I definitely was given a different impression at the time from the college. I don’t see how this is entirely fair. Of course I want my daughter to have a great future but had things been explained more clearly I would have reached out to someone who was capable of making sure I knew what I was signing. I feel deceived and taken advantage of.

    • I agree with you Jennifer I am Total disability and i was told i could never get any loan for any kind of education so when the college that my kids go to told me to apply for a parent plus loan i was under the impression that I would be denied and than once it was denied they college could offer another type of grant. NOW I find out that both of my children parent plus loans did go through HOW??? This is so deciveing.

  12. I am in the process of determining whether to sign up for my social security at age 62 or wait till full retirement age. I am wondering if and how social security income will impact my student loan payment which is in an IBR plan based on my spouse’s income as I am not employed.

    • That is a tricky question because the taxation of social security can get complicated. To the extent that your social security check increases your adjusted gross income on your tax return, your payments could go up. If it doesn’t affect your AGI, it should affect your IBR payments.


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