Hi Heather.
I have been seriously researching repayment on parent plus loans.  My dad consolidated 3 parent plus loans and now his total is like 190k   With a monthly payment of 1100 bucks.  I read that parent loans are not eligible for income based repayments. My father took out these loans to get us through college. In a perfect world it would be great if all children could contribute to the payments but that is not going to happen. The debt increase I believe because he deferred it several times. My question is. Any thing we can do to get some of this forgiven? Is there any help aside from winning the lottery to delete this debt. I mean at least getting the loan back to original principal would be a start.

I’m in a situation just like that and am willing to help.  Let me know.

Any advice would be great! I found out the payments are $825 a month

Will do.  I’m heading out of town in a few minutes so won’t be able to say much right now.  With payments of $825, how much debt is that, a little over $100k, or so?  Who actually signed for the loans?  Was it just dad?

The loan is under my dad’s name. Each of us have individual student loans, but he took out the parent plus and beared most of the depth. I am not sure the exact amount of the dept but i know its over 100k.

If you consolidate your Parent PLUS loans they will become eligible for the Income Contingent Repayment Plan…no matter what you do Parent PLUS loans will never become eligible for IBR or Pay As You Earn.  The ICR will be based on your Parent’s income, depending what it is, there may be a savings

That’s a problem with consolidation, it appears, if it makes both parents’ incomes available for garnishment in a worst case scenario.  Also, my regular PLUS debt dies with me or the child for whom I borrowed.  While no one wants that to happen, it is a consideration. 

Buckeye, have your folks reviewed who owns what?

You can only consolidate loans that are under your name.  So the scenario doesn’t change.  If the loan is in the fathers’s name (Parent PLUS loans only appear in one parent’s name) the consolidation loan will be in the father’s name.  If there is a garnishment it will be based on the father.  Now if him and his spouse file jointly the IRS will go after the entire amount of the refund (there may be ways around this but talk to an accountant!) but that would happen whether or not you consolidate.  As far as the death portion, you are correct.  If the child dies for a PLUS loan, loan is forgiven but will not be for a consolidation.  In either situation though if the borrower dies the loan will be discharged.

When I look at the calculation for what a payment would be for a consolidation it appears the income for both parents is used. 

It is…I must have left that part out.  While the loan is in only the borrower’s name if you file MFJ with your spouse the spouse’s income is included.  If you file MFS, it is not.  There are lots of boards on here that debate the merits of MFJ vs MFS.  All I was saying is it is under one person’s name not what was included, so in conclusion you are absolutely correct it would include both people’s income.

If the spouse’s income is not included in the calculation (providing we file mfs), then way cool.

Just remember to talk to a tax person first…you lose certain deductions and credits (such as child tax credit, etc.) if you file MFS…you have to make sure it makes sense overall

I’m a CPA so I’ve got that part figured out.  Back when I first looked at consolidating it was not clear that we could go mfs and just count my income.  I appreciate you pointing that bit out to me.

Great!  Sounds like we have a plan now.

There’s another thing that I can’t find certainty on, and that is whether or not Roth distributions can increase the amount of payment.  Does the direct loan people add that to the AGI in calculating the payment?  I’m still trying to figure that one out, for sure.

https://loanconsolidation.ed.gov/loancalc/servlet/Controller?controller_task=startCalculator

Can you see why one looking at this would think they count spousal income?