How to refinance parent PLUS loans: Benefits, best lenders, and steps

There are some benefits to refinancing parent PLUS loans, but be sure to consider the federal student loan protections you're giving up with this move.

By Christy Bieber

Written by

Christy Bieber

Writer

Christy Bieber has been working full-time as a freelance writer since 2008. She has written blogs, news articles, textbooks, and online courses on the topics of law, finance, and history. She lives with her husband, two children, and beagle.

Edited by Kelly Larsen

Written by

Kelly Larsen

Editor

Kelly Larsen has written and edited content that spans many personal finance topics, including buying a home, saving for retirement, and paying off student loans. She first started learning about the world of finance through her work at Finance101.com. In 2020, Kelly helped launch Paven, a financial well-being app.

Updated August 27, 2024, 5:47 PM EDT

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Parent PLUS loans are federal student loans available to parents of undergraduate students. Many parents take out these loans to help their children afford the cost of college. In fact, an estimated 3.6 million parents had outstanding PLUS loans as of the second quarter of 2024, according to the Department of Education.

If you're one of those parents, you may be interested in refinancing your PLUS loans. However, before refinancing, it's important to understand how the process works, and to carefully consider the pros and cons.

Understanding parent PLUS loan refinancing

Parent PLUS loan refinancing involves securing a new, private loan to repay existing PLUS loans. The new loan would have a different interest rate and repayment terms than the current debt.

PLUS loans are federal student loans, and the Department of Education (ED) does not offer a refinance option. However, the ED does allow parents to consolidate with a Direct Consolidation Loan. This is similar to refinancing in that it involves taking out a new loan.

It's important to understand the key differences between refinancing and consolidation:

Refinancing means borrowing loan funds from a private student loan lender to pay off existing federal student debt, then repaying that private loan. The new loan ideally has a lower interest rate and better terms. Banks, credit unions, and online lenders all offer refinance loans to qualified borrowers. Once you refinance federal loans with a private loan, you lose your federal benefits.
Consolidating means taking out a Direct Consolidation Loan from the Department of Education that has different terms than your existing loan(s). It does not lower your interest rate, but it can open up the door to more payment plan options, including income-driven repayment. Parents can also become eligible for Public Service Loan Forgiveness by consolidating. Parents keep their federal borrower benefits with a consolidation loan.

Current private student loan refinance rates

Best lenders for refinancing parent PLUS loans

EdvestinU: Best for high loan balances

Advertiser Disclosure

High balances

EdvestinU

3.8

Fox Money rating

Check Rates

on Credible’s website

Min. Credit Score

700

Fixed APR

6.00 - 10.37%

Variable APR

8.07 - 9.82%

Loan Amount

$7,500 - $200,000

Term

5, 10, 15, 20

Pros and cons

No degree is required to refinance, and you can refinance while still in school

Autopay discount of 0.25 percentage points

New Hampshire residents can get up to 1.5% interest rate reduction

Prequalification is available

Refinancing is only available in select states

Minimum loan balance is higher than some competitors and maximum balance is lower

Cosigner release requirements are strict

More details

Overview

EdvestinU is a loan program offered by Granite Edvance Corporation and offers affordable rates for refinance loans. Borrowers can refinance federal and private loans, and fixed and variable rate loans are available.

EdvestinU refinance loans are available to residents of about 20 states, and the lender has higher loan minimums and lower maximums than some competitors. Both of these factors limit who can (or might want to) refinance with this lender, but eligible borrowers do have various student loan repayment term options.

Interest rates

Fixed or variable

Minimum credit score

700

Minimum income

Does not disclose

Loan terms

5, 10, 15, or 20 years

Loan amounts

$7,500 to $200,000

Cosigner release

24 months

Eligibility

U.S. citizens or permanent residents who are at least 18 years old and reside in Alaska, Arkansas, Colorado, Connecticut, Florida, Maine, Massachusetts, Nebraska, New Hampshire, New Jersey, New York, North Carolina, Puerto Rico, Rhode Island, Texas, Utah, Virginia, Washington, West Virginia, and Wisconsin.

RISLA: Best for income-based repayment

Income-based repayment

RISLA

3.7

Fox Money rating

Check Rates

on Credible’s website

Min. Credit Score

680

Fixed APR

6.34 - 8.54%

Variable APR

Loan Amount

$7,500 - $250,000

Term

5, 10, 15

Pros and cons

Income-based repayment options for borrowers experiencing financial hardship

Up to 24 months of forbearance

Up to 36 months of graduate school deferment

No degree required to refinance

Rate discounts available

No cosigner release

Limited repayment terms

Minimum $40,000 income required

No variable rates

More details

Overview

Founded in 1981, Rhode Island Student Loan Authority (RISLA) is a nonprofit lender that offers refinance loans to borrowers in all 50 states. Though most private lenders require borrowers to have graduated to qualify for refinancing, RISLA also serves borrowers who didn’t complete their degree.

RISLA offers income-based repayment to borrowers in financial distress. Additionally, borrowers may also access up to 24 months of forbearance in the event of financial hardship. Borrowers who return to graduate school may defer repayment on their refinancing loans for up to 36 months.

Interest rates

Fixed

Minimum credit score

680

Minimum income

$40,000

Loan terms

5, 10, or 15 years

Loan amounts

$7,500 minimum up to of $250,000, depending on degree

Cosigner release

None

Eligibility

Borrower or cosigner must meet credit requirements. Student must be a U.S. citizen or permanent resident and have used original student loans to attend an eligible degree-granting institution.

Citizens: Best for current account holders

Current account holders

Citizens

4.7

Fox Money rating

Check Rates

on Credible’s website

Min. Credit Score

Does not disclose

Fixed APR

5.89 - 10.99%

Variable APR

7.02 - 12.45%

Loan Amount

$10,000 - $750,000

Term

5, 7, 10, 15, 20

Pros and cons

Repayment terms between 5 and 20 years

Can prequalify and check your rates online

Autopay and loyalty discounts

Must make 36 payments before eligible for cosigner release

Must make 12 payments on your loans before you can refinance if you earned an associate degree or didn’t complete your degree

Relatively high loan minimum

More details

Overview

Citizens offers student loan refinancing to qualifying borrowers who refinance at least $10,000 in student loan debt.

Undergraduate borrowers can refinance up to $300,000 in student loans, while those who borrowed for graduate or professional degrees have higher limits of $500,000 or $750,000. Citizens offers fixed and variable rates and repayment terms between five and 20 years.

If you’re a medical resident, you can refinance your student loans and only pay $100 per month for up to four years while completing your residency or fellowship.

Interest rates

Fixed or variable

Minimum credit score

Does not disclose

Minimum income

Does not disclose

Loan terms

5, 7, 10, 15, or 20 years

Loan amounts

$10,000 minimum, with a maximum of $300,000 for bachelor’s degree or below; $500,000 for graduate degrees; and $750,000 for professional degrees

Cosigner release

36 months

Eligibility

Must refinance at least $10,000 in student loans and be a U.S. citizen, permanent resident, or resident alien with a valid U.S. Social Security number. Must have earned at least a bachelor's degree to qualify.

Methodology

We evaluated these student loan refinancing lenders based on interest rates and origination fees, loan amounts, loan terms, discounts, whether cosigners are accepted, and more. Our team of experts gathered information from each lender's website, customer service department, directly from our partners, and via email support. Each data point was verified by a third party to make sure it was accurate and up to date.

How to refinance parent PLUS loans: A step-by-step guide

If you believe refinancing parent PLUS loans is right for you, here are the steps you'd need to take in order to do it.

1. Shop around and compare rates

Refinancing may make sense if you can get a lower rate than what you are currently paying on your parent PLUS loans. If you're interested in lowering your monthly payments through a longer repayment term, you can do so with a Direct Consolidation Loan, which won't cause you to lose federal benefits and protections.

Rates vary from one private student loan lender to another. If you are refinancing in order to pay less interest, it makes sense to ensure you're getting the best rate available for your financial situation.

Most lenders allow you to get a personalized rate quote online by submitting preliminary financial details, without affecting your credit score. Gather quotes from multiple lenders and compare them to find out which works best for you.

2. Apply for a refinance loan

After you compare rates, complete a full application for a refinance loan with the lender of your choice.

You will need to provide some personal information and details about your income. At this point, you'll undergo a hard credit check and may need to provide documents proving your earnings, such as tax returns and pay stubs. The best rates on private refinance loans go to borrowers with strong credit who earn enough money to repay the loan.

3. Provide information about the PLUS loans

When you go through the refinancing process, you must tell your lender what loans you want to refinance and what the total loan balance is.

Most lenders have minimum and maximum loan limits. You can also choose to refinance private and federal loans together, which can simplify repayment by leaving you with only one payment.

5. Repay your new private student loan

Once your loan funds have been distributed and your federal student debt is paid off, you will now have a new obligation to your private student loan lender.

You must repay your loan according to the schedule you agreed to when you borrowed. You will have a choice of repayment terms, with longer repayment timelines resulting in lower monthly payments but more interest paid over time.

What are the eligibility requirements for refinancing parent PLUS loans?

Individual lenders set their own eligibility requirements to refinance parent PLUS loans. Here are some common requirements:

U.S. citizenship status or permanent residency, with a valid U.S. Social Security number
A credit score that meets the lender's criteria
Proof of income
Hold a college degree (though some lenders allow you to refinance without a degree)
Have loans that fit within the lender's minimum and maximum limits

What are the pros and cons of refinancing parent PLUS loans?

There are advantages and disadvantages to refinancing parent PLUS loans. The biggest benefits include the option to get a lower interest rate and change your repayment terms.

If you can qualify for a refinance loan at a lower rate than the current rate on your PLUS loans, refinancing can reduce the cost of borrowing. If you have parent PLUS loans and other federal and private loans, you can also get one refinance loan to repay all of these existing debts.

Combining multiple existing loans into one new loan simplifies repayment and can result in a lower monthly payment in some circumstances - especially if you have qualified for a lower rate or made your repayment timeline longer. Just be aware that increasing the time to pay off your debt can result in higher interest costs over time, even if you reduce your rate.

There are some huge disadvantages, though. By converting federal student loans into private student loans, you give up the chance to take advantage of the benefits exclusively available to federal loan borrowers.

While PLUS loans don't give you all the benefits of some other federal loans, like subsidized student loans, they do provide opportunities for loan forgiveness, income-driven payment plans, and flexible forbearance and deferment options.

Private student loan forgiveness is not an option that is likely to ever be on the table, and you'll lose access to other government relief programs, such as any future opportunities for student loan refunds.

Think very carefully about giving up these benefits before moving forward.

Pros & Cons

Pros

Potential for a lower interest rate
Combine multiple federal and private loans for one easy payment
Potential for lower monthly payments
Choice of lenders among banks, credit unions, and online lenders

Cons

Loss of federal borrower benefits, like loan forgiveness options
Loss of access to federal protections, like the COVID-19 forbearance
Can't convert back to federal student loans
Can be hard to qualify without strong credit

Is refinancing a parent PLUS loan right for me?

Refinancing a parent PLUS loan may be the right choice for you if:

You have no plans to ever take advantage of federal borrower benefits.
You can reduce the interest rate you're paying on your PLUS loans.
You want to combine PLUS loans and private student loans to simplify repayment.

If you are interested in the possibility of loan forgiveness, income-driven payment, or other benefits (like the flexibility to change your repayment plan), you should not refinance PLUS loans. You should consider a Direct Consolidation Loan instead, as this makes Public Service Loan Forgiveness, income-driven repayment, and income-driven forgiveness possible.

FAQ

Can you refinance parent PLUS loans?

You can refinance parent PLUS loans with a student loan refinancing lender as long as you meet the lender's criteria. You will give up federal borrower benefits if you take this action.

What are the benefits of refinancing parent PLUS loans?

Benefits of refinancing parent PLUS loans include the possibility of reducing your interest rate and combining multiple student loans into one new loan with a single monthly payment.

Who offers the best parent PLUS loan refinance rates?

Lender rates can vary widely, so you must shop around with several lenders to find the loan provider that offers the best rates for you. The best refinance rates will be lower than what you're currently paying on your parent PLUS loan.

How do I transfer a parent PLUS loan to my child?

The only way to transfer a parent PLUS loan to your child is for your child to find a private student loan refinancing lender who is willing to give them a refinance loan to pay off your PLUS loan. They would need to meet the lender's borrowing requirements.

What credit score is needed to refinance parent PLUS loans?

Individual lenders set different rates for refinancing student loans. Most lenders are looking for good credit, which is a FICO score of 670 or higher.

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Christy Bieber