How to Refinance Parent Plus Student Loans

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  • How to Refinance Parent Plus Student Loans
Author: Joseph Reinke, CFA

At FitBUX, we’ve helped thousands of parents with Parent Plus loans.  We get asked all the time about how to transfer parent plus loans to a student or how can you get a lower interest rate on a parent plus loan.  The only way to do so is by refinancing.

Therefore, the next question we get is how to refinance Parent Plus Loans. Refinancing Parent Plus loans is free.  Also, the process will be similar to a normal student loan refinance except with a few extra steps. In this article, we’ll be going over those steps and how you can start that process today.

You’ll first need to know what exactly a Parent Plus Loan is in order to understand what you’ll have to do to refinance it.

What is a Parent Plus Loan?

A Parent Plus Loan is a type of federal student loan available to the parents of dependent undergraduate students.

The U.S. Department of Education offers these loans as part of its Direct Loan program. The purpose of a Parent Plus Loan is to help pay for education expenses not covered by other financial aid. It’s important to note that while the loan is issued to the parent, it’s meant to support the financial needs of the student for their educational journey. Unlike other forms of student loans, the repayment and legal responsibility fall onto the parents, not the student.

Should you Refinance the Parent Plus Loan?

A lot of whether you should refinance or not will depend on what your goals are for that loan. If you’re looking to pay it off as soon as you can and simply trying to lower the rates as much as you can, then answer would be yes, you should at least look into refinancing to see if it’s worth doing so.

Just note, refinancing will turn those federal loans into a private loan and being a private loans, there’s more limitations as far as repayment plans go and losing out on the federal protections.

If you’re curious on if this is right for your situation, please don’t hesitate to reach out to our financial experts at FitBUX and we’d be happy to walk you through the different companies we partner with such as Splash Financial, SoFi, and Laurel Road.

How to Refinance a Parent Plus Loan

There are 2 different avenues you can go about refinancing a Parent Plus Loan. The first way is when the parent begins the process. The other way will be through the student.  Also, you’ll have to decide, are you refinancing the loan and its going to stay in the parents name or is it going to be in the students name?

For example, on Splash, a popular refinancing company we’re partnered with, this is how the process would look if you were to begin the process:

Steps to Refinance Parent Plus Loans:

  1. Two different ways to refinance Parent Plus loan: either initiated by the parent or the student. If you are not transferring the loan to the child, simply apply and proceed with the application. If you are transferring it to the student or are the student proceed to step 2.
  2. If you’re the student, you need to have your master promissory notes which serves as evidence that the loan was for your education.
  3. The student would need to fill out the borrower affidavit which confirms they are taking over the debt of their parent that was acquired for their education.
  4. Once the affidavit is filled, you can proceed to fill out the application, and eventually, check rates.

Benefits to Refinancing Parent Plus Loans

There are numerous benefits to refinancing the Parent Plus Loans into a private loan.

Key Points:

  • Transfer the loan to the student: Through refinancing, Parent Plus Loans can be transferred to the student, thereby relieving the parent of the loan.
  • Lower the interest rates: Refinancing provides a chance to lower interest rates of the loan, which can result in significant savings over the life of the loan.
  • Gain financial flexibility: Refinancing allows for extension of the loan term, which can offer much needed financial flexibility by lowering the monthly repayments. The loan can still be paid off early without penalty if desired.

What If My Student Can’t Qualify

Sometimes your student that you have the Parent Plus loan for won’t be able to qualify on their own.  That is OK.  Many lenders FitBUX works with will allow you to transfer it in your name and co-sign. However, unlike Parent Plus loans, the refinanced loan would have a co-signor release.

This release means that you are on the loan as a co-signor. However, after 1 – 3 years of payments (depending on the lender) the student has the ability to release you from the loan.  Therefore, you’ll no longer be liable for it!


Parent Plus Loan refinancing can be a beneficial financial strategy depending on your individual circumstances and goals. Whether you’re a parent eager to transfer the loan to your child, or you are aiming to gain more flexibility in your repayment plan or lower the interest rates on your loan, refinancing can offer substantial benefits. However, it’s crucial to remember that transitioning from federal to private loans involves certain considerations, such as the change in repayment plans and the loss of federal protections.

If you’re unsure whether refinancing is the right move for you, or if you have any queries regarding the process, the team at FitBUX is always ready to help. We can assist you in making an informed decision that supports your financial health and educational goals.

Joseph Reinke, CFA

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About the Author

Joseph Reinke is a Chartered Financial Analyst (CFA) Charter Holder and founder of FitBUX which has helped over 14,000 young professionals on their journey to financial freedom. Joseph has been personally investing since he was 12 years old.

In addition, he has experience in student loans, mortgages, wealth management, investment banking, valuation, stock trading, and option trading. He has been on 100s of podcast and has been invited to 100s of universities to discuss financial planning with their soon to be graduates.

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