Should I refinance Parent PLUS loans? Pros, cons, tips, & alternatives

By Corey Buhay | Published on February 19, 2026

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You wanted to help your child pay for college, so you took out Parent PLUS loans. It seemed like a good plan at the time, but now you’re burdened by the monthly payments.

Parent PLUS loans—federal student loans that parents borrow on their child’s behalf—often come with high rates and origination fees. According to the U.S. Department of Education, the average parent borrower currently has more than $30,000 in outstanding Parent PLUS loans. That amount can take decades to pay off.

In addition, changes to federal student loan programs are scheduled to take effect in 2026 under the One Big Beautiful Bill. These updates include new borrowing limits for certain federal loans. For families who need to borrow beyond those federal caps, private student loans may help fill the gap. If you end up with a mix of federal and private loans, refinancing later on could be one way to combine those balances into a single loan with one monthly payment—depending on your financial profile and goals.

Refinancing your Parent PLUS loans is one strategy to help alleviate some of the financial stress of student loan debt. Here are the pros and cons of refinancing Parent PLUS loans, and tips to help you decide if it might be the right move for you.

Consolidation vs refinancing Parent PLUS Loans

Consolidating and refinancing Parent PLUS loans are two ways to help relieve the headache of managing multiple loans and payments. Here’s what each entails.

Federal student loan consolidation

Student loan consolidation is a federal program. When you consolidate your Parent PLUS loans, you’ll combine them with any other federal debt you might have into a single new loan. (Note that private loans aren’t eligible for federal consolidation.)

Here are some of the benefits of consolidation:

• Consolidating Parent PLUS loans costs nothing; there are no origination fees.
• It may simplify your monthly payment if you’ve been managing multiple payments to different loan servicers.
• Consolidation can make some types of federal loans eligible for income-driven repayment plans.

Here are few of the downsides to federal consolidation:

• You may end up paying slightly higher interest rates. That’s because your new rate will be a weighted average of your old rates, rounded up to the nearest eighth of a percent.
• Any interest outstanding at the time of consolidation gets tacked onto the loan principal. This can lead to higher future interest charges.
• You cannot take advantage of improved credit score or income to qualify for lower interest rates. (The only way to reduce your rate is through student loan refinancing depending on your financial profile and creditworthiness.)

Student loan refinancing

With refinancing, you’re taking out a new loan from a private lender—not another federal loan from the government. Your new lender will pay off your existing loan amount. Then, they’ll issue a new refinance loan in its stead. You’ll make payments on this new loan going forward.

When you refinance Parent PLUS loans, you could qualify for lower interest rates, which could save you money over the life of the loan.

The pros of refinancing Parent PLUS Loans

One way to manage your education loan debt is to refinance your Parent PLUS Loans. Here are a few of the advantages keep in mind if you’re thinking of refinancing:

1. Refinancing could save you money

If you’re a borrower with good credit and a stable income, you may qualify for a lower interest rate than you have with your current loans.

2. You’ll have one easy payment

If you took out multiple parent loans for your child’s education, you likely have several due dates, minimum payment amounts, and loan servicers to remember. It can be overwhelming. And mix-ups can cause you to miss payments.

When you refinance your student loans, you can combine them all into a single new loan. You can also use refinancing to combine a mix of federal and private parent loans. Going forward, you could have just one payment, one due date, and one student loan servicer to remember. That can dramatically reduce the stress associated with loan repayment.

3. Refinancing could reduce your monthly payment

Even if you don’t qualify for a lower interest rate, refinancing can still give you the opportunity to extend your loan term. This is a popular way to get a lower monthly payment. Just keep in mind that extending your term may end up costing you more in the long run, since you’ll end up making more total interest payments.

4. Refinancing could give you more flexible repayment options

The interest rates on Parent PLUS loans are fixed for the life of the loan, and these rates are determined based on the year you borrowed the money. On the other hand, private loan rates may be either fixed or variable. Variable-rate loans (sometimes called “variable annual percentage rate loans”) tend to start with lower interest rates than fixed-rate loans do. However, variable interest rates also have the potential to increase over time since they’re subject to fluctuations in national trends.

You might choose a fixed interest rate if you want:

• a predictable monthly payment.
• Certainty about how much you’ll repay over the loan term.
• an interest rate that doesn’t change.

You may opt for a variable-rate loan if:

• rates are high (like they are right now). This means you’re more likely to see your interest rate go down when rates eventually fall.
• you can only afford to pay the lowest possible rate a lender offers you—and that rate happens to be variable.
• you plan to pay off your loan early, before rates have time to go up very much. (Disclaimer: make sure there are no prepayment penalties.)

Unlike federal loan rates, private loan rates are based on your credit history. Generally, loan borrowers with a strong credit history and a stable income meet the eligibility requirements for the lowest rates. If your credit is healthy, you may qualify for lower rates than you’re currently paying on your Parent PLUS loans.

The other benefit of a student loan refinance: You can choose a lender that’s best for you. Look for perks like rate discounts for automatic payments and the ability to skip a payment once a year for borrowers in good standing (Earnest offers both).

Cons of refinancing Parent PLUS Loans

Although refinancing can be a smart strategy, there are some drawbacks to consider before submitting your application:

1. You won’t be eligible for alternative payment plans

If you have federal Parent PLUS Loans and can’t afford your payments under a standard 10-year repayment plan, you have three options available to you:

• You can sign up for a Graduated Repayment Plan: With this approach, your payments start out low and increase every two years. You’ll still pay off your debt within 10 years, but you’ll have lower payments early on.
• You can sign up for an Extended Repayment Plan: Under an Extended Repayment Plan, your repayment term is extended to 25 years. You’ll pay more in interest than you would with a 10-year plan, but you could have a much lower payment.
• You can take out a Direct Consolidation Loan: You can consolidate your debt with a Direct Consolidation Loan. When you do so, your loan will be eligible for an income-contingent repayment plan, which extends your repayment term and caps your monthly payment at a percentage of your discretionary income.

If you decide to refinance your student loans, your loan becomes private instead of federal. Private student loans aren’t eligible for the above federal benefits.

2. You won’t qualify for Public Service Loan Forgiveness or other repayment assistance programs

If you have Parent PLUS Loans and work for a qualifying non-profit organization or government agency, you may qualify for Public Service Loan Forgiveness (PSLF). With PSLF, your loan balance is forgiven after you make 120 monthly payments while working for an eligible employer.

However, private loans aren’t eligible for PSLF. If you refinance your Parent PLUS Loans, you’ll no longer qualify for loan forgiveness programs or other federal student loan protections.

3. You may end up paying more in interest

If you refinance your loans and are able to extend your repayment term, you may end up paying more in interest charges than you would if you kept to your current repayment schedule. However, that tradeoff may be worth it to get more breathing room in your monthly budget.

4. You’ll need a decent credit score

Most private lenders conduct a credit check on prospective borrowers. If you don’t meet a lender’s minimum credit score requirements, you may not qualify for refinancing.

Should I refinance my Parent PLUS Loans?

You may opt to refinance your Parent PLUS loans if you want to:

• Potentially save money over the life of the loan
• Simplify your bill
• Potentially lower your monthly loan payments
• Take advantage of flexible repayment options
• Transfer the debt to your child (not all lenders offer this option, please check with your lender)

You may choose to not to refinance if you want to:

• Take advantage of alternative federal payment plans
• Keep your current fixed interest rate

Explore Parent PLUS refinance with Earnest

If you took on debt to pay for your child’s bachelor’s degree, you may feel overwhelmed by your loan balance. Student loan refinancing can provide much-needed relief, but it’s important to understand both the pros and cons before making a decision.

If you decide it’s time to refinance your Parent PLUS Loans, consider working with Earnest. We know parents are busy—which is why we strive to make the refinancing process as smooth and streamlined as possible. With Earnest, you can choose a loan term that works for your schedule. We never charge origination fees or prepayment penalties, and we let eligible borrowers skip a payment once per year for free. Check your rate today to see how much you could save. It takes just minutes, and it won’t impact your credit score.