Can Parent PLUS Loans Be Forgiven? PSLF, ICR, and Discharges

Parent PLUS loan forgiveness is possible through several federal programs: Public Service Loan Forgiveness, Income-Contingent Repayment, and discharges for total and permanent disability, death, school closure, false certification, and borrower defense. The parent who signed for the loan is the only person who can qualify, because federal law treats the parent as the sole borrower. Each pathway has its own rules, timeline, and tax treatment, and several of those tax rules changed on January 1, 2026.

Public Service Loan Forgiveness

PSLF cancels the remaining balance on your Direct Loans after 120 qualifying monthly payments made while you work full-time for a qualifying employer. Qualifying employers include federal, state, local, and tribal government agencies and 501(c)(3) nonprofits.¹ Full-time means averaging at least 30 hours per week, and you must be working for a qualifying employer both when you hit 120 payments and when you apply.

Parent PLUS loans are Direct PLUS Loans, so they are technically eligible for PSLF without consolidation. In practice, most parents consolidate first. Consolidation is what makes you eligible for Income-Contingent Repayment, which lowers the monthly payment and leaves a balance to forgive after ten years. On standard repayment, the loan pays off before you reach 120 payments and nothing is left to cancel.

Payments you made on your Parent PLUS loan before consolidating are not automatically lost. If they were made under a qualifying repayment plan while you worked for a qualifying employer, a weighted average of those payments carries over to the new Direct Consolidation Loan.¹ You submit employment certification forms and the forgiveness application through StudentAid.gov.²

PSLF forgiveness is permanently excluded from federal taxable income under the Internal Revenue Code. That exclusion is separate from the American Rescue Plan Act provision that expired at the end of 2025 and it remains in place.³

Income-Contingent Repayment Forgiveness

Parent PLUS borrowers are shut out of most income-driven plans. The only income-driven option is Income-Contingent Repayment, and only after you consolidate the Parent PLUS loan into a Direct Consolidation Loan.⁴ The double consolidation workaround that once opened up other plans is closed, and the SAVE plan is not accepting new enrollments.

Under ICR, your monthly payment is the lesser of 20 percent of your discretionary income or what you would pay on an income-adjusted 12-year schedule. Any balance remaining after 300 qualifying monthly payments—at least 25 years—is forgiven.⁴ You have to recertify your income and family size every year to stay on the plan. Missing the recertification can cause unpaid interest to capitalize onto your principal. ICR provides no interest subsidy, so interest exceeding your payment accrues throughout the 25-year period.

ICR forgiveness is no longer shielded from federal income tax. The American Rescue Plan Act temporarily excluded student loan forgiveness from taxable income for 2021 through 2025, and that provision expired on January 1, 2026. Balances forgiven through ICR in 2026 or later are treated as taxable income on your federal return.

Total and Permanent Disability Discharge

If a severe physical or mental impairment prevents you from working, you can apply for a Total and Permanent Disability discharge. Your condition must be expected to result in death, must have lasted at least 60 continuous months, or must be expected to last at least 60 continuous months.

You can establish eligibility in one of three ways:

A Veterans Affairs notice showing a 100 percent service-connected disability rating or a determination of individual unemployability.
Social Security Administration documentation showing you receive SSDI or SSI and that your next disability review is scheduled at least five years out.
A physician’s statement that your condition meets the federal standard for total and permanent disability.

Once the Department of Education approves the discharge, the loan is cancelled. The three-year post-discharge income monitoring period that used to apply to SSA and physician-certified approvals has been eliminated, so your earnings after discharge no longer put the loan at risk of reinstatement.

Death Discharge

A Parent PLUS loan is discharged if either the parent borrower or the student for whom the loan was taken out dies.⁵ That two-life rule is unusual among federal loan cancellations.

The family or estate submits a certified death certificate to the loan servicer, or provides an electronic or fax copy, or the Department verifies the death through an approved federal or state database. If you had consolidated your Parent PLUS loan and the student dies, the portion of the consolidation balance attributable to that Parent PLUS loan is discharged.⁵ Any payments received after the date of death are returned to the sender or the borrower’s estate.

Death discharges were excluded from federal taxable income for discharges between January 1, 2018, and December 31, 2025. Discharges in 2026 may be treated as taxable income unless Congress extends the exclusion, and state income tax may apply separately.⁶

School Closure Discharge

If the school your child attended closed while the student was still enrolled, you can have your Parent PLUS loan discharged.⁷ The discharge is also available if the student withdrew within 180 days before the closure, and the Department can extend that window for exceptional circumstances. The student must not have completed the program or transferred credits to finish it elsewhere. Approval wipes out the full balance including accrued interest, and any payments already made are refunded.

False Certification and Borrower Defense

Two discharge routes address school misconduct.

False Certification

You can seek a discharge if the school falsely certified the student’s eligibility for the loan. That covers several specific situations: certifying a student who lacked a high school diploma and did not meet alternative eligibility, forging the borrower’s signature on the application or promissory note, arranging a falsified high school diploma, certifying a student whose physical or mental condition, age, or criminal record would have barred them from working in the field under state law, or a loan taken out through identity theft against the borrower. Approval eliminates the full balance and refunds prior payments.⁸

Borrower Defense to Repayment

Borrower defense is a broader claim built on the school’s misconduct—substantial misrepresentations about job placement, program outcomes, or costs that influenced the decision to enroll or borrow. For a Parent PLUS loan, the student’s experience at the school is the basis for the claim.⁹ If the Department finds by a preponderance of the evidence that the school made an actionable misrepresentation or omission and the borrower was harmed, you can receive a partial or full discharge.

Tax Consequences After January 1, 2026

What you owe the IRS on a forgiven balance depends on which program cancelled it.

PSLF forgiveness is permanently excluded from federal taxable income under IRC Section 108(f)(1). The ARPA expiration did not affect it.³
ICR forgiveness after 25 years is taxable as ordinary income for discharges on or after January 1, 2026.
School closure and false certification discharges are not treated as gross income under IRS guidance.¹⁰
TPD and death discharges were excluded through December 31, 2025. Discharges in 2026 may be taxable unless Congress restores the exclusion.

If a 2026 or later discharge is treated as taxable income, you may still qualify for the insolvency exclusion under IRC Section 108(a)(1)(B), which applies when your total debts exceeded the fair market value of your assets at the time of forgiveness. Some states tax forgiven balances independently of federal rules, so check your state’s treatment before filing.

How to Apply

Applications run through StudentAid.gov or directly to the Department of Education.

For PSLF, submit the combined employment certification and forgiveness form on StudentAid.gov. Recertify employment every year and whenever you change employers.
For ICR forgiveness, the Department should process the discharge automatically after 300 qualifying payments. Keep your annual income recertification current to avoid being removed from the plan.
For TPD, submit the discharge application with your VA documentation, SSA records, or physician certification.
For a death discharge, the family or estate representative contacts the loan servicer with a certified death certificate or equivalent proof.
For school closure, false certification, and borrower defense, file the corresponding discharge application on StudentAid.gov.

Before you apply, gather your Federal Student Aid ID, your loan account numbers from StudentAid.gov, and the documentation the program requires. Your servicer may place the loan in administrative forbearance while the application is reviewed. Watch your account for status updates and respond quickly to any request for more information.

If Your Loan Is in Default

A defaulted Parent PLUS loan is not eligible for forgiveness until you bring it back to good standing. You have two ways to do that.

Rehabilitation: make a series of agreed monthly payments, currently as low as $5 per month, to restore the loan. You can rehabilitate a Direct Loan once; starting July 1, 2027, the limit rises to twice per loan. Rehabilitation also removes the default from your credit report.¹¹
Consolidation: roll the defaulted loan into a new Direct Consolidation Loan, then enroll in ICR. Consolidation does not remove the default record from your credit history.

While the loan is in default, the Department can garnish your wages, seize your tax refunds, and offset Social Security benefits. Entering rehabilitation can suspend an active wage garnishment while you make the agreed payments. Once the loan is back in good standing, you regain access to PSLF, ICR forgiveness, and the discharge programs.

You Cannot Transfer the Loan to Your Child

No federal program lets you move a Parent PLUS loan into your child’s name. The only route is private refinancing, in which a private lender issues the student a new loan that pays off the federal debt. From that point, the student is the borrower and you are released.

That trade is permanent, and the cost is high. The refinanced loan is no longer federal, so it loses eligibility for PSLF, ICR, TPD discharge, death discharge, and federal forbearance or deferment. The private lender sets all terms, and most are not required to cancel the balance if the borrower dies or becomes disabled. The student also needs sufficient credit and income, or a creditworthy cosigner, to qualify at a workable rate.

1
eCFR. 34 CFR 685.219 – Public Service Loan Forgiveness Program
2
MOHELA. Loan Forgiveness and Discharge Programs
3
Office of the Law Revision Counsel. 26 USC 108 – Income From Discharge of Indebtedness
4
eCFR. 34 CFR 685.209 – Income-Driven Repayment Plans
5
eCFR. 34 CFR 685.212 – Discharge of a Loan Obligation
6
Federal Student Aid. Death Discharge
7
eCFR. 34 CFR 685.214 – Closed School Discharge
8
eCFR. 34 CFR 685.215 – Discharge for False Certification of Student Eligibility or Unauthorized Payment
9
eCFR. 34 CFR Part 685 Subpart D – Borrower Defense to Repayment
10
Internal Revenue Service. IRS and Treasury Issue Guidance for Students With Discharged Student Loans and Their Creditors
11
Federal Register. Reimagining and Improving Student Education