A Parent PLUS loan is an option provided by the U.S. Department of Education to allow parents to fund education for their children. Other student loans provided by the Department of Education, such as Stafford Loans and Perkins Loans, are issued to the student. Since these two loan types are issued to different borrowers, they cannot be consolidated into one loan.
Definition
Loan consolidation is the process of taking a new, large loan to pay off multiple existing debts. The result is one loan payment each month. Consolidation makes repaying debts simple, and it may also save you money in the long run. The Department of Education does provide several options for loan consolidation, including PLUS loan consolidation. Stafford Loans, Perkins loans and other federal loans can also be consolidated.
Restrictions
There are several restrictions on federal loan consolidation. First, private loans are not eligible for consolidation. Second, the consolidated loans must all be in the name of one person. For example, a PLUS loan in the name of a parent and a Stafford loan in the name of a student cannot be consolidated into one. Therefore, a parents can consolidate multiple PLUS loans, and a student can consolidate multiple student loans, but the two cannot be mixed.
Qualifications
Beyond the restrictions on types of loans to be consolidated, there are also qualifying regulations. If one of your loans is in default, you must make a satisfactory repayment plan with the current lender in order to consolidate. You will also face restrictions on when you can consolidate; you must graduate, leave school or drop to half-time enrollment to consolidate. You can only consolidate one time.
Application
If you would like to apply for direct federal loan consolidation, begin by speaking to your current loan servicers to determine your eligibility. Then, visit the U.S. Department of Education's website or call the department directly. You will obtain an application for the consolidation loan. You must supply information on the debts you are consolidating and your income. If you would like to consolidate student loans and your parents want to consolidate PLUS loans, you will have to apply separately from your parents.
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