Parent Plus loan consolidation is the process of consolidating one or more outstanding parent plus loan.  By consolidating multiple loans into one, the borrower only pays one monthly payment and is able to take advantage of a lower consolidated interest rate.  The Higher Education Act or HEA was established to provide for a loan consolidation program under the Family Education Loan (FEEL) Program and the Ford Federal Direct Loan (FEDL) Program.  By consolidating multiple loans into one loan, all other parent plus loans are paid off and a new parent plus consolidated loan is created. 

As the borrower, who would be the parent that took a loan out for their child, the benefits are tremendous.  The parent plus loan consolidation program is able to simplify loan repayment by combining all the current federal student loans, which may have different terms and repayment schedules or may have been made by a different lender, and becomes one loan.  The interest rate may also be much lower than one or more of the underlying loans, which will also save you additional money every month.  Lastly, the monthly payment amounts on a parent plus consolidation loan is usually lower and the amount of time to repay may be extended beyond what was available in the separate loan programs.

When a borrower participated in the parent plus loan consolidation program, the lender pays off the original loans and originates a new loan for the total amount of the loan or loans consolidated.  After the lender reviews the application, a credit check is performed. If the borrow has blemishes in their credit score or has a lower than average credit score than the lender will send a letter to the borrower outlining the options that are available.  The borrower has the right to appeal the decision, document extenuating circumstances, or obtain an eligible endorser.  The lender will send a verification certificate to the loan holder requesting information about the loans if the borrowers application is approved.

After the parent plus loan approval process is completed, a loan summary will be mailed to the borrower and a check will be mailed to the loan holder to pay off the loans.  A parent plus consolidated account will be set up after the loans have been approved and paid off.  The parent plus loan borrowers will receive important information regarding their loan status and repayment information.  The first payment is usually due within 60 days of the first disbursement. The parent plus loan consolidation process usually takes around 4-6 weeks to complete. 

If you are still interested in completing a parent plus loan consolidation application, you should contact the lender or lenders that currently hold your parent plus loans.  If you only have one lender then you are limited to that lender only for consolidation.  Almost every student loan lender offers a parent plus loan consolidation program. 

There are a few things that you should review before making a decision to complete a parent plus loan consolidation.  The first thing is to review and compare the repayment options, payback benefits, and interest rates between the lenders.  By comparing these variables between lenders, you will be able to determine how much money you will save on a monthly basis.  You should also ask you lender if there are any repayment benefits that you would loss or gain if you decided to consolidate your student loans.