Federal parent PLUS loans can never be transferred to the student. If you borrow a parent PLUS loan for your child’s education, you’re the only one legally responsible to repay the debt.
What you can do is this: Borrow the PLUS loan now. Make monthly payments on the debt or defer payments while your student is in college. Then refinance the debt into a private loan in your child’s name once he or she can meet the qualifications.
Eligibility will vary by lender, but generally your child will need to have credit scores of at least 690, a history of making loan payments and enough income to comfortably cover the payments. Not all refinancing companies will refinance a PLUS loan in a child’s name, but most do.
Some refinancing lenders will accept a parent as a co-signer for the child, then release the co-signer after a certain number of payments have been made.
By refinancing your parent PLUS loan in your child’s name, the responsibility to repay the debt is now your child’s. You trade the current loan you have for a new student loan at a lower interest rate.
There are drawbacks to consider with refinancing.
Your refinanced loan will no longer have the federal repayment options and loan forgiveness that your PLUS loan had. That includes income-contingent repayment, which can make payments more manageable by capping payments at a portion of your income and increasing the length of repayment.
Refinancing also eliminates loan forgiveness options for PLUS loan borrowers.