How To Cancel Parent Plus Loan

Parent PLUS loans can be a significant financial burden for parents. However, canceling them is possible under certain circumstances. This article serves as a comprehensive guide on how to navigate the process of canceling Parent PLUS loans, including eligibility criteria, steps to cancel, frequently asked questions, and useful resources.

Introduction: Parent PLUS loans are federal loans that parents can use to help pay for their child's education. While these loans can be a valuable resource, they can also become a financial burden. Fortunately, there are options available for parents who need to cancel their Parent PLUS loans. This guide outlines the steps involved in canceling these loans and provides helpful information for those considering this option.

Eligibility for Loan Cancellation: Not everyone is eligible to cancel their Parent PLUS loans. Generally, loan cancellation is available in the following circumstances:

  1. Death or Disability: If the parent borrower passes away or becomes permanently disabled, the loan may be eligible for cancellation.

  2. School Closure: If the school that the student was attending closes while they are enrolled or within 120 days of their withdrawal, Parent PLUS loans may be eligible for cancellation.

  3. False Certification: If the school falsely certified the borrower's eligibility for the loan or the student's eligibility to receive the loan, the loan may be eligible for cancellation.

  4. Bankruptcy: In rare cases, Parent PLUS loans may be discharged in bankruptcy if certain conditions are met.

Steps to Cancel Parent PLUS Loans:

  1. Gather Documentation: Collect any necessary documentation, such as death certificates, proof of disability, or bankruptcy paperwork, depending on the reason for cancellation.

  2. Contact Loan Servicer: Reach out to the loan servicer handling the Parent PLUS loan to inquire about the cancellation process.

  3. Submit Required Forms: Complete and submit any required forms or documentation as instructed by the loan servicer.

  4. Follow Up: Stay in contact with the loan servicer to ensure that the cancellation process is progressing smoothly.

  5. Monitor Loan Status: Keep track of the loan status to confirm that it has been canceled successfully.

Frequently Asked Questions (FAQs):

  1. Can Parent PLUS loans be forgiven? Parent PLUS loans are not eligible for forgiveness under most federal student loan forgiveness programs. However, they may be eligible for cancellation under certain circumstances.

  2. How long does it take to cancel Parent PLUS loans? The time it takes to cancel Parent PLUS loans can vary depending on the specific circumstances and the responsiveness of the loan servicer. In some cases, cancellation may be processed relatively quickly, while in others, it may take longer.

  3. Are Parent PLUS loans dischargeable in bankruptcy? While it is possible for Parent PLUS loans to be discharged in bankruptcy, it is relatively rare and requires meeting specific criteria to prove undue hardship.

  4. What happens if Parent PLUS loans are not canceled? If Parent PLUS loans are not canceled and the borrower is unable to make payments, they may become delinquent or go into default, which can have serious consequences for the borrower's credit score and financial stability.

Useful Resources:

  1. Parent PLUS Loans - Federal Student Aid
  2. Loan Discharge - Federal Student Aid

Conclusion: Canceling Parent PLUS loans can provide much-needed relief for parents facing financial difficulties. By understanding the eligibility criteria and following the necessary steps, borrowers can navigate the cancellation process successfully. While cancellation may not be an option for everyone, it is worth exploring for those who qualify under the available criteria.

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