College costs often exceed the amount families can pay up front and students can borrow. To cover the leftover expenses, many parents take out federal loans in their names. These Parent PLUS loans are easy to qualify for and can ensure a student has the necessary funds to complete their degree.
But they can also leave parents dragging a sack of debt as they approach their retirement years.
If you have outstanding Parent PLUS loans, you might be considering handing off the debt to your student, especially if Junior has graduated and landed a job with a reliable paycheck. And yes, it is possible to transfer your Parent PLUS loans to your student, but the process isn’t simply a matter of filling out a few government forms. It also comes with some drawbacks.
[Read: Best Parent Student Loans: Parent PLUS and Private.]
How to Transfer Parent PLUS Loans
You can’t directly transfer your Parent PLUS loans to your student within the federal student loans program. Instead, your only option is to refinance your federal PLUS loans into a new private loan in your child’s name.
While refinancing to a private loan can shift the debt out of your hands and may even result in a better interest rate, it also causes you to forfeit some key federal protections and benefits that you can’t get back, such as forbearance.
To start the process, your student will first need to go to a private lender and apply for a refinanced student loan in their name. The lender will determine whether to provide the loan and what the rate will be based on your child’s financial information. Your child will include details about the Parent PLUS loan when applying, and they should clarify that the loan is in your name.
If the lender offers a low interest rate, your child may want to also refinance any student loans they hold in their own name, consolidating them all into one new loan. The lender will then pay off the remaining balance on the Parent PLUS loans and any other student loans being refinanced, leaving your child with the one loan.
[Read: Best Student Loan Refinance Lenders.]
Why You Might Want to Transfer Parent PLUS Loans
For many families, Parent PLUS loans can be a key piece of paying for college. That’s because students are limited to borrowing between $5,500 and $7,500 per year, which isn’t enough to cover attendance costs at many colleges. Parents can take out much larger federal loans.
About 3.6 million borrowers held Parent PLUS loans as of the end of 2025, according to the Department of Education.
Those parent loans can become a major burden down the road.
“That parent who is 55 with $60K in PLUS loans has just strapped on a debt they have to repay during their Social Security-claiming age and their early withdrawal age,” says Eric Croak, a certified financial planner and the president of Croak Capital. “I guess the easy solution is keep the loan and just suffer, but that could mean delaying retirement or taking money out of your investment portfolio too early.”
In other cases, parents may have agreed with their students when the loans were initially taken out that the children would ultimately take over repayments once they had started their careers and established steady incomes.
There are also several reasons why transferring Parent PLUS loans might soon be more appealing, or at least somewhat less risky. President Donald Trump’s One Big Beautiful Bill Act overhauls the federal student loans program, and starting in July, parents will no longer be eligible for some of the benefits that might have motivated them to hang onto their PLUS loans.
Beginning on July 1, 2026, parents with PLUS loans will no longer have access to the more affordable income-driven repayment plans, and they won’t qualify for forgiveness. Any existing Parent PLUS loans that aren’t consolidated into a federal direct consolidation loan by that date also lose eligibility for those benefits. (Parent PLUS borrowers may still have time to secure access to these benefits if they consolidate ASAP.)
Even parent borrowers with existing loans already in an income-driven repayment plan would lose access to that plan if they take out new PLUS loans, a scenario that could cause some parent student loan payments to jump.
What to Consider When Transferring a Parent PLUS loan to Your Student
When you’re deciding whether to transfer your PLUS loan to your child, it’s important to compare the terms of your federal loan with terms offered by several private lenders.
“Just like any refinance, you need to evaluate the pros and cons,” says Gene Elder, a certified financial planner and financial consultant at Thrivent. “What are my new terms, what is the interest rate, if there’s any up-front fees, what are my protections? Those need to be factored in.”
Here are some of the potential advantages and drawbacks of refinancing your federal Parent PLUS loans into a private student loan in your child’s name.
Pros
— Parents move debt out of their name. Transferring the loan shifts the financial responsibility entirely to the child, freeing the parents from a significant debt obligation that could affect their own retirement or borrowing capacity.
— The interest rate might be better. A student with a solid income and a strong credit score may qualify for a lower interest rate than the original Parent PLUS loan rate. The Parent PLUS rate for the 2025-26 school year was 8.94%, while some private lenders offer rates of 4% or lower to borrowers with excellent credit scores and low debt-to-income ratios.
— The loan allows your child to build credit. Taking on the debt can give your child an opportunity to build their credit history, which could benefit them when it comes time to take out future loans, such as a mortgage.
Cons
— Loss of federal protections and benefits. Refinancing a federal Parent PLUS loan into a private loan means forfeiting valuable federal benefits, such as forbearance due to financial hardship. The new private loan is governed only by the terms of the private lender.
— Your student might not qualify. A private lender requires the child to meet specific underwriting criteria, often including a minimum credit score and sufficient income to cover the loan payments. If your student has a limited credit history or a low income, they may not be approved for the refinance without a cosigner.
— You student may not be financially ready to pay off debt. While the transfer may be beneficial for you, your child might not have a stable enough income or adequate financial management skills to take on the full burden of repayment. This lack of readiness could lead to missed payments, financial stress or even loan default.
[Read: Best Private Student Loans.]
An Alternative to Transferring Parent PLUS Loans: Keep the Loan, but Have the Student Pay
One alternative to consider is to work out a payment arrangement with your child. In this case, you (the parent) would keep the loan, but the child would take over the monthly payments. This allows you to keep federal benefits intact while unloading the financial burden to your child.
Experts say this can often be the most flexible option, although it’s important that there’s a strong level of trust between you and your child.
“The easiest workaround, and one that I think is vastly underrated, is an informal agreement between parent and student where the student continues to pay the monthly bills directly to the loan servicer, but the loan remains in the parents’ names,” says Croak. “You keep all the benefits of federal loans, the student assumes the practical responsibility without undergoing a credit check or new contractual obligations, and you can always revisit the arrangement if something in their life changes.”
More from U.S. News
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Can I Transfer My Parent PLUS Loans to My Student? originally appeared on usnews.com