Will Student Loan Forgiveness Include Parent Plus Loans?

Large group of happy college students celebrating their graduation day outdoors while throwing their caps up in the air.
skynesher / iStock.com

President Joe Biden announced his administration’s much-anticipated plan for student loan forgiveness on Aug. 24.

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“Today, the Biden Administration is following through on that promise and providing families breathing room as they prepare to start re-paying loans after the economic crisis brought on by the pandemic,” the administration said via a White House fact sheet. 

Under the plan, up to $10,000 in federal student debt relief may be offered to borrowers earning less than $125,000 (or $250,000 if married). That figure rises to up to $20,000 in student loan cancellation for Pell Grant recipients. Further, the White House announced an extension of the student loan repayment pause “one final time” — to Dec. 31, according to a tweet from the president.

Per The Wall Street Journal, said student loan forgiveness also applies to Parent Plus loans, according to White House sources quoted by the outlet.

“The inclusion of Parent Plus loans means millions of families who have taken on massive debt could see their debt load decreased. While the government imposes a limit on the amount of undergraduate debt a student can take out, the Parent Plus program lets people borrow the total cost of attendance — room and board, books and personal expenses on top of tuition — for as many years as it takes to get a degree,” The Wall Street Journal reported.

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While this provision is not yet included in the White House’s fact sheet, Washington Post reporter Jeff Stein corroborated this story, tweeting that: “Parent Plus loans ARE included in the debt forgiveness plan, per this reliable source Again: We’ll need to see final details but would be very big deal if on point.”

What is a Parent Plus Student Loan, and How Much Do Parents Owe?

Sallie Mae explains on its website that Parent Plus loans are federal student loans issued directly to parents.

“The government takes a look at your credit, offers some flexibility in repayment options, and the ability to fill funding gaps after exhausting federal student loans to students, grants, and scholarships. For the 2021-2022 school year, the Parent Plus loan has a 6.28% interest rate plus an origination fee of 4.228%,” according to the website.

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The Hill reported in June that, according to the latest data from the Department of Education, parents of 3.6 million students owe more than $107 billion in Parent Plus loans as of March 2022. This figure represents roughly 6% of the entire $1.6 trillion in federal student loan debt Americans owe.

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About the Author

Yaël Bizouati-Kennedy is a full-time financial journalist and has written for several publications, including Dow Jones, The Financial Times Group, Bloomberg and Business Insider. She also worked as a vice president/senior content writer for major NYC-based financial companies, including New York Life and MSCI. Yaël is now freelancing and most recently, she co-authored  the book “Blockchain for Medical Research: Accelerating Trust in Healthcare,” with Dr. Sean Manion. (CRC Press, April 2020) She holds two master’s degrees, including one in Journalism from New York University and one in Russian Studies from Université Toulouse-Jean Jaurès, France.
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