A Parent Plus Student Loan is a type of federal student loan that is taken out by a parent on behalf of a child. These loans are taken out by the parents of the student in their names and are never transferred to the student’s names after they graduate. This means that the student has absolutely no obligation to pay this loan. Thankfully student loan consolidation and refinancing measures are available for this type of parent-sponsored loan as well.

Another big difference between Parent student loan and the other kinds (such as the Stafford loans) is that there is no grace period while the child is in school or after graduation. Payments on these loans start right away.

Just as an aside it is also important to know that this type of Parent Plus student loan can never be a joint loan that is arranged between one parent and another. It can only be taken out by one parent. This is true even if the parents have been married for fifty years.  Only one person’t social security number is responsible for the repayment of the loan.

Also these loans tend to be taken out separately and annually by the parent to cover the cost of the school year. So this means that the one parent will apply for the school loan four years in a row. This loan is typically acquired in the summer and half is distributed to the student in the fall and the other half in the spring.

Student loan consolidation experts recommend immediately refinancing these loans as soon as the second half of the loans are fully disbursed to the student in the spring.  For instance let’s say you took out a Parent Plus loan in the first year. As soon as the second half of the loan is disbursed you will begin to pay it off. Then your child may enter a second year of school. During that time you will likely take out a second loan. As soon as the Spring disbursement of the second year loan is given and payments kick in you need to take those two loans and consolidate them into one. Your payment will be much lower if you refinance the two loans into one rather than pay them both off separately.

Usually the process of applying for a loan consolidation for two or more student loans is quite simple. The loans are combined and a promissory note for the payment back is made with a different company (that you choose usually.) From the point of the actual student loan consolidation  you will then pay back that company instead of the lenders that you initially chose.

This type of student consolidation loan is especially recommended if you have more than one child in school as it can enable to substantially lower your payments to almost one quarter what they would be if you had not bothered to lower the loan in the first place.  As long as it is the same parent taking out  these loans year after year you should have no problem consolidating these loans year after year as well.