How to Refinance Parent Student Loans

Refinancing a private parent student loan or Parent PLUS loan could save you money if you qualify for a lower annual percentage rate (APR). Some lenders even allow you to transfer the debt into your child’s name.

But refinancing isn’t the best solution for everyone. For example, you should consider alternatives if you have a Parent PLUS loan and want to maintain access to federal benefits. 

We’ll cover how to refinance parent loans on your own or into your or your child’s name. Plus, we share our top picks for companies that refinance student loans for parents.

Can parents refinance student loans?

Yes, it’s possible to refinance parent loans. Your options depend on whose name you want to refinance in and what type of parent student loans you have. 

You can refinance private parent and Federal Parent PLUS loans. However, before you refinance a Parent PLUS loan, understand switching to a new private loan means you’ll no longer have access to federal benefits such as federal forbearance and student loan forgiveness programs.

Some private lenders even allow you to transfer a parent loan into your child’s name through refinancing. Refinancing is your only option to transfer a Parent PLUS loan to your child because the federal government doesn’t allow you to shift payment responsibility.

Below is a table highlighting the main differences between private and federal Parent PLUS loans:

	Private parent loans	Federal Parent PLUS loans
Refinance?	✅	✅
Consolidate?	✅	✅
Transfer to student?	✅*	❌
Release a cosigner?	✅	❌**

*Some lenders allow you to refinance parent loans into the child’s name.

**Federal loans don’t have cosigners, but they may have endorsers. This federal student loan fact sheet indicates that the same endorser must agree to repay the PLUS Consolidation Loan.

The next steps will differ depending on whether you want to refinance parent student loans in the parent’s name or transfer them to the child.

Our expert recommends: Consider the risks

Erin Kinkade

CFP®

When refinancing from federal to private student loans, the main factor you must consider is losing federal benefits. Parents considering refinancing loans should look at their current financial condition. If the child is in a situation where they can take on the debt payment (and the parents planned to transfer the debt to their child), they should discuss whether they’re comfortable losing federal benefits for the parent and the child. If the parent chooses to repay the loan for their child regardless of the child’s financial condition, the parent should consider the impact of losing the benefits that accompany federal loans. And as always, when in doubt or stuck at a crossroads, consult a financial professional.

How to refinance parent student loans in the parent’s name

Here are the typical steps to refinance parent student loans in your name.

1. Compare lenders. To find the best deal for your financial situation, compare rates, terms, and fees from at least three lenders. Some allow you to prequalify online to preview rates and terms without harming your credit. 
2. Use a refinance calculator. Estimate your savings by entering your current and new loan information into a student loan refinance calculator.
3. Submit refinance application. Once you’ve found the best lender for you, submit a formal loan application. Documentation you’ll likely need includes recent tax returns or pay stubs, government-issued ID such as your driver’s license, and current loan information.
4. Repay new private loan as promised. The final step is to make on-time payments to avoid late fees and potential harm to your credit profile.

How to refinance parent student loans into the child’s name

As a student, you can take the following steps if you or your parents want the loan transferred to your name.

1. Review your finances. Check your credit score to determine whether you can independently meet a lender’s requirements. Many lenders require good credit to qualify for refinancing without a cosigner.
2. Shop around. Compare rates, terms, fees, and eligibility requirements across lenders, and be sure the lender allows your parent to transfer the debt to you.
3. Submit loan application. After you’ve found the right lender, apply for the loan and provide the required documentation—often recent pay stubs and bank account statements.
4. Repay new loan. When your parent’s loan is paid off, you’ll be responsible for the loan. Repay it as promised to avoid hurting your credit score.

Our expert weighs in: Financial implications of transferring a parent loan to a child

Erin Kinkade

CFP®

If the child is approved, the parent will be relieved of the debt. This will improve their debt-to-income ratio (DTI) and free up cash flow. In contrast, the child’s credit will dip, but this should be temporary as long as the child makes on-time payments. This will, in turn, increase the child’s DTI, so it’s wise for the child to keep an eye on this to ensure they don’t take on additional debt that would cause them to exceed the thresholds to be approved for other financing, such as a mortgage. A benefit is that if the child has thin (little to no) credit, this is a terrific opportunity to build a credit history and work toward an excellent credit rating. But this will reduce the child’s free cash flow within their budget, so they must account for this when tracking their income and expenses.

Best lenders to refinance parent student loans

The table below includes five of our picks for the best refinance student loan lenders that allow you to refinance parent loans in your name or your child’s name. We selected these lenders based on hours of research comparing rates, fees, and features.

Click the lender’s name in the table to find out more about its refinance loan for parents.

Lender	Starting rates (APR)	Transfer to child?
Credible	4.75%	✅*
ELFI	5.28%	✅
Earnest	5.44%	❌
RISLA	6.34%	✅**

*Not all of Credible’s partner lenders allow this.

**Parent must remain a cosigner on the loan.

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Best marketplace – Credible

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LendEDU rating: 4.8 out of 5

• Access to multiple refinancing offers from various lenders
• Simplified comparison of rates and terms
• User-friendly platform for a quick and efficient refinancing process

Credible acts as a marketplace, aggregating refinancing offers from different lenders, making it an excellent choice for parents who want to see multiple rates. This level of comparison can lead to lower interest rates or friendlier repayment terms. 

Transferring the loan to the child depends on the policies of the specific lender you select through Credible.

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Best for personalized service: ELFI

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LendEDU rating: 4.7 out of 5

• Tailored refinancing options for parent loans
• Dedicated loan advisors
• No application or origination fees

Education Loan Finance (ELFI) stands out for its personalized service in refinancing parent loans. With dedicated advisors, ELFI helps parents navigate the refinancing process, ensuring they find a plan that best suits their financial situation. 

ELFI offers competitive rates and terms, allowing parents to transfer loans to a child subject to eligibility.

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Best for skipping a payment: Earnest

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LendEDU rating: 4.6 out of 5

• Option to skip 1 payment per year
• Customizable loan terms
• No fees

Earnest offers a unique feature that allows parents to skip one payment per year, providing flexibility in managing their finances. Parents can customize their loan terms by choosing the repayment term. 

Earnest doesn’t allow parent loans to be refinanced into a child’s name.

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Best for hardship protections: RISLA

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Powered by Credible

LendEDU rating: 4.4 out of 5

• Strong focus on borrower protection and financial hardship
• Competitive interest rates
• Nonprofit lender with a focus on education loans

RISLA (Rhode Island Student Loan Authority) is a nonprofit lender specializing in education loans, including refinancing options for parents. Its emphasis on borrower protection makes it a reliable choice, especially for those concerned about unexpected financial hardships.

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Alternatives to refinancing for Parent PLUS loans

If you have a Parent PLUS loan and don’t want to lose access to federal benefits due to refinancing, consider federal student loan consolidation.

To consolidate a Parent PLUS loan, you must apply for a Direct Consolidation Loan by visiting the StudentAid website. Be prepared to provide the following information:

• Your FSA ID
• Current loan information
• Financial information

Consolidating your loans with a Direct Consolidation Loan can help you become eligible for the income-contingent repayment (ICR) plan. This plan determines your monthly payment as the lesser of:

• How much you’d pay over 12 years based on your income 
• 20% of your discretionary income

As an alternative to federal student loan consolidation, you could also consider refinancing a Parent PLUS loan with a home equity line of credit (HELOC) or home equity loan. Remember: If you default on either of those loans, a lender could foreclose on your home.