Consolidating PLUS Loans
PLUS loans (Parent Loans for Undergraduate Students) can be consolidated just like Stafford and Perkins Loans. However, parents cannot consolidate their children's Stafford loans and students cannot consolidate their parent's PLUS loans into a single consolidation loan because the borrowers are different.
Parents can take out a new loan for each school term and reconsolidate each year, locking in those rates when the rates are favorable. Consolidating PLUS loans also can provide access to different repayment terms, such as extended, graduated, and income contingent repayment. (Read more about repayment options and terms.)
Since the consolidation loan has an interest rate capped at 8.25%, consolidating your PLUS loans can reduce the interest rate. It is best to consolidate PLUS loans separately from Stafford and Perkins Loans to maximize the benefit of the interest rate reduction.
Remember, PLUS loans are the financial responsibility of the parents, not the student. If the student agrees to make payments on the PLUS loan, but fails to make on-time payments, the parents will be held financially responsible!
