How to Refinance Parent PLUS Loans

Can You Refinance Parent PLUS Loans?

Yes, you can refinance a parent PLUS loan by taking out a new private loan. This is the only way to lower your interest rate or potentially transfer the loan to your child. Some lenders give you the option to either apply for the private student loan in your name or have your child apply and take over the debt.

Can You Transfer a Parent PLUS Loan to Your Child?

To transfer the debt from a parent PLUS loan to your child, you may be able to refinance with a private lender that allows the student to apply for the loan. This could make sense if your child has good credit, a strong income and the willingness to take on payment responsibility. Not all lenders offer this option, however.

Your child will also need to fit the lender's eligibility criteria. Each lender sets its own guidelines on whether this is possible and what process you'll need to follow. For instance, the child may need to apply for the refinance and certify that the loan was taken out to pay for their education costs.

This differs from refinancing in your own name because your child will become responsible for repaying the loan balance. The new loan will also have different terms and conditions than your parent PLUS loan, as well as a different interest rate.

How to Refinance Parent PLUS Loans

These are the steps you can take to refinance a parent PLUS loan:

1. Check Whether Refinancing Will Help

Before you start the process of refinancing, it's a good idea to make sure the new loan will help you meet your financial goals. For instance, will you lower your monthly payments and put some room in your budget? Or will you have the ability to transfer the loan to your child?

If your goal is to save money, then calculate how much interest you'll pay over time on the new loan. Compare that to the interest costs on your current loan over its term. Then identify your potential savings, if any.

2. Research and Compare Lenders

Once you determine refinancing is your best option, research lenders that can refinance parent PLUS loans. If your goal is to refinance the debt in your child's name, then you'll need to find lenders that offer this option. Many lenders offer a prequalification, where you can estimate your interest rate and loan terms with a soft credit pull. This won't hurt your credit scores. Once you gather a few offers, compare interest rates, lender fees, loan amounts, repayment terms and eligibility requirements.

3. Gather Loan Documents

Prepare the documents you'll need to submit to a lender. These may include:

• Identification, such as a driver's license
• Proof of U.S. citizenship, such as a Social Security number
• Proof of employment and income, such as pay stubs
• A 30-day payoff statement for your current loan, which is typically available through your loan servicer's online portal

4. Submit an Application

Now you'll go through the process of filling out the loan application. You can typically complete this step online, though some lenders allow you to do it over the phone or in person. The lender will review your application, which will typically cause a hard credit inquiry to appear on your credit reports, possibly temporarily lowering your credit score by a few points.

5. Read the Loan Offer

Once the lender has reviewed your loan application, it will choose whether to provide you with a loan offer. If your application is approved, make sure you're comfortable with the loan amount, term and interest rate, and read through the loan agreement to understand all the fees and requirements.

If you agree to the terms, then you'll sign a loan agreement. Some companies pay your current lender directly, while others give you the cash to pay off the debt yourself.

Either way, it's important to get written confirmation that your loan is paid off. Keep the confirmation in a safe place. Then start making payments on your new loan.

Should You Refinance Parent PLUS Loans?

Refinancing a federal student loan involves careful consideration. Before making your decision, think about these points:

• What's your credit score? Strong credit can help you qualify for a competitive interest rate. This may help you save money if you can shave a few points off the interest rate you're currently paying.
• Who will apply? You'll need to consider who will refinance the loan: you or your child? It could make sense for you to apply for the refinance if you have a higher credit score and room in your budget for the monthly payments. On the flip side, your child may apply if you want them to take over the debt and they agree to it.
• Do you qualify for loan forgiveness? If you take the right steps, the balance on your loan could be forgiven through the Public Service Loan Forgiveness program or an income-driven repayment plan. Refinancing into a private loan makes you ineligible for either plan, so consider whether you're OK with losing this option.
• How's your financial standing? Private student loans come with fewer borrower protections compared to federal student loans. If you think you'll need to postpone or reduce payments in the future, it might be best to stick with your parent PLUS loan.

Alternatives to Refinancing a Parent PLUS Loan

You may find that you don't qualify for a refinance or you'd rather not lose protections that come with federal student loans. Changes to the parent PLUS program that took effect July 1, 2026, mean parent borrowers can no longer utilize income-driven repayment or extended repayment programs for PLUS loans not consolidated before July 2026, severely restricting their federal repayment options.

To avoid refinancing your parent PLUS loan, you could strike an agreement with the child who received financial help via your parent PLUS loan. For instance, they can give you money each month to cover the loan payments. If you decide to go this route, it's best to agree on a payment amount and due date each month, and get the details in writing.

The Bottom Line

If you decide to refinance your parent PLUS loan, you'll need to take out a new private student loan. Private lenders usually require borrowers to have strong credit to qualify for these loans and receive competitive interest rates. Working on improving your credit before applying can help improve your chances of refinancing.

Payment history can heavily impact your credit score, so establishing on-time payment habits for all credit accounts is key. You can also focus on paying down other debts if possible. If you're not sure what your next move should be, Experian Boost^®ø could help you improve your credit.