How Parents Get Student Loan Debt Relief Under Biden's New Plan

The White House plan to cancel up to $20,000 of debt also includes parents who borrowed money for their children's college education.

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Peter Butler
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An illustration of a college graduate with parents next to a piggy bank and in front of huge stacks of money

Parent PLUS loans are included in the federal student loan debt forgiveness program.

Nataliia Nesterenko/Getty Images

The White House last Monday officially launched its program to forgive $10,000 to $20,000 in federal student loans for eligible borrowers, only to see a federal appeals court issue a temporary injunction Friday to pause the program. Despite the legal setback, the Education Department expects to start canceling student loan debt in mid-November.

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The program to discharge up to $20,000 in student loan debt for borrowers earning $125,000 a year or less includes parents who've taken out Parent PLUS loans to help pay for their children's college education or graduate school. Just like their kids, eligible parents can apply for student loan debt forgiveness, and they need to apply separately.

Parent PLUS loans include about 3.7 million families who owe a total of $104 billion, according to The Century Foundation -- the median family debt is $29,600. Learn which parents and which loans are eligible for student loan forgiveness and how parents can apply to cancel up to $20,000 of their debt.

For more, learn how the application process for student loan forgiveness works and how debt cancellation could impact your credit score.

What are Parent PLUS loans?

Parent PLUS loans are federally funded student loans that parents can take out to help pay for their kids' higher education. Note that the PLUS acronym comes from the now-outdated name for the loans: -- "Parent Loan for Undergraduate Students." The Department of Education now calls parent loans "Direct PLUS loans." 

Parent PLUS loans are unsubsidized, meaning parents have to pay interest while their children are in school. The fixed interest rate on Parent PLUS loans -- currently 7.54% per Bankrate -- is also higher than student rates, currently 4.99%

Which parents get debt forgiveness with the White House plan?

Parents who hold Direct PLUS loans with the federal government and who earned less than $125,000 or $250,000 for a household in either 2020 or 2021 should qualify for at least $10,000 in debt forgiveness once the White House plan is enacted.

Even if you have defaulted on a Parent PLUS loan, you are still eligible for debt forgiveness. 

What about Pell Grants, parents and student loan forgiveness?

Students who received Pell Grants during their higher education are eligible for up to $20,000 in student loan debt forgiveness. That rule also applies to parents, but only if the parents themselves received Pell Grants.

If a parent who did not receive a Pell Grant as a student holds a PLUS loan for a child who did receive a Pell Grant, the parent does not qualify for the $20,000 forgiveness, only the $10,000. Similarly, if a parent who did receive a Pell Grant as a student takes out a loan for a child who has not received a Pell Grant, that parent is eligible for $20,000.

How do parents apply for Parent PLUS student loan forgiveness?

Parents will need to apply for student loan forgiveness separately from their children. To do so, they'll access their FSA account to confirm all of their personal information and loan data. When the application for student loan debt forgiveness launches, parents will need to file a claim using their own account credentials. 

What about parents with PLUS loans who also have their own student debts?

As the plan currently stands, each student loan borrower is eligible for $10,000 to $20,000 in student loan forgiveness -- it doesn't matter if the debt was incurred as a student or parent. Parents can claim forgiveness for both their own student loans and their Parent PLUS loans, but the total debt forgiven will be limited to $10,000 or $20,000.

For more, see how getting a refund of student loan payments could complicate your debt forgiveness.