Parent PLUS Loan Loophole Using Double Consolidation

We've helped hundreds of parents use the double consolidation loophole to get a lower monthly payment for their PLUS Loans. In this video, we break down the process to make your Parent PLUS Loans eligible for the SAVE plan so you can get a much more affordable payment than you could get through the income-contingent repayment plan or the Extended or Graduated plans.
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Hosted by Stanley Tate
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[@handleshtick]

The way student loans work, particularly Parent PLUS, is downright criminal. Lending someone a huge amount of money they will never be able to pay off, at an interest rate that means after payment the balance of the loan goes *up* instead of down... That is a contract for indentured servitude. It should not be legal for anybody to do that, let alone the government. Makes my blood boil. The way this country treats its less fortunate is sick.

[@melissahinojosa5599]

How can i do this for 3 loans

[@nassimagahrules]

how do you apply for save? when i try to choose save to combine my 2 consolidated loans SAVE doesn't come up, i did the first step by making consolidations via paper with 2 loan servicers. can I just choose the ICR plan and then switch to SAVE or is that not possible. please help

[@jamescermak5594]

Sadly we consolidated right before the pandemic 😡 so we are sol. …So our interest which is already at 150K will keep growing…so three years too soon trying to do the right thing ..🤷

[@keithm.9726]

Thank you! I’ll get it sent off tomorrow! 🙏🙏🙏

[@giaservin3620]

Can I still complete this process if I already consolidated all 2 pp loans together? I just saw this video after consolidating my loans. Please help!

[@SabrinaPucha]

What if I have 1 parent plus loan and nothing else? Can I still do this loophole?

[@loveleiroots2264]

How come you never talk about the student loan forgiveness tax bomb that occurs when your student loan lender forgives all or a portion of your debt, causing you to include this amount in your taxable income? Especially for borrowers who's Federal student loans won't be forgiven after the year 2025, when the tax waiver ends?

[@springviolette4125]

This happened to me. I settled one loan and they 1099 me for the rest. Sucks ass!!

[@loveleiroots2264]

@@springviolette4125 sorry to hear that. It's great getting forgiveness but it's awful not being informed what happens AFTER forgiveness - an IRS "Tax Bomb" on federal taxes for borrower's loans that aren't forgiven until after 2025. I know there are many people discussing this in the subreddit r/studentloans (that he references in his shorts and videos) and I'm really amazed he hasn't highlighted this fact.

[@stanleytate]

The tax bomb is a secondary or tertiary concern if you can't afford your monthly payments. Also, with proper planning, you can avoid the tax liability.

[@loveleiroots2264]

@@stanleytate wrong. The tax bomb is a primary concern especially for those whose loans are forgiven in 2026 instead of 2025. How much can they possibly plan in a year? People can't even afford to pay their student loan debt, let alone thousands of dollars worth of taxes owed to IRS; with loan forgiveness ranging from as small as a couple thousand to 500k plus? Not everyone can avoid the tax liability if they don't qualify for partial or full exclusion of the amount of the "tax bomb" due to insolvency. 🤨

[@stanleytate]

@@loveleiroots2264 Wrong? I don't know about that. That you disagree with me? Sure. I stand by my position that the tax bomb doesn't matter if you can't afford your payments under any non-IDR Plan.

[@mathewthomas6585]

My daughter just started her undergrad this fall 2023. She will be graduating in the spring of 2027. I’m taking a parent plus loan for her studies. Would double consolidation help in my case to use the SAVE plan.

[@stanleytate]

I'm not sure. I'd have to see your loans to know for sure. You can estimate your payments using the Loan Simulator on StudentAid.gov.

[@lynnburkhardt5509]

Hi! Great video! Can I include my 2 PP loans that are for my son who is still in college? They are from his freshman and sophomore year. I will be starting the process for my other 2 children that have already graduated college but not sure about my sons PP loans. Thanks!

[@wendykelly7551]

If we already consolidated all loans into one loan we cannot use the double consolidation loophole. Is there any other option?

[@stanleytate]

There are a bunch of strategic options to explore, but none of them are automatic or straight-forward.

[@tanmar7791]

Need your advice: I was following your steps. And I consolidated one with aidvantage and one with nelnett. After approval then I went on to the next step and did an online application and tried to consolidate the two companies together choosing mohela this time. I just received a denial letter in the mail stating denied code 20 because "an existing direct consolidation loan must be consolidated with another eligible loan" what does this mean what do I do now :(

[@stanleytate]

I’m sorry to hear that. I’d have to see your loans to understand what happened.

[@lisagosweilercslp]

A few weeks seems very optimistic - how did she do that in a few weeks.? The fastest I have seen is about 4-5 months unless you have already completed some of the consolidations before you began this process.

[@stanleytate]

You can get a consolidation done in 3 to 4 weeks -- especially if you waive the 10 day holding period.

[@rickmooney5931]

Have you heard anything about Mohela not allowing this because their software updated??

[@stanleytate]

No. That's not something we've heard.

[@rickmooney5931]

@stanleytate does it matter if I chose icr on final consolidation instead of standard? I know I will send in paper for idr instead but didn't know if it red flagged it

[@tanyastea4404]

If my PPL are currently under PSLF but I want to do the double consolidation, is there a different process to follow or the same process as described?

[@stanleytate]

The process isn't different overall, but you do need to move quickly to make sure you get the maximum credit. And then you also need to work with certain servicers because you're working towards PSLF.

[@katiematsen5380]

I mailed out my 2 consolidations, I have loans with aidvantage so I sent one there and one to mohela, it got denied for duplication, what did I do wrong?

[@stanleytate]

Aidvantage handles the consolidation for MOHELA. So basically you sent both applications to the same place.

[@katiematsen5380]

thank you! Going to re do it with one going to nelnet then

[@jweathersby3877]

Good evening! Thank you I need to do this... Phewwww.

[@IndianPinoyFAM]

is the loophole officially closed? How much are your services?

[@stanleytate]

It's still open until next July.

[@user-dx3xz4dh5s]

I'm still being denied to be put on Save even after the double consolidation. I've uploaded the IDR Save payment plan and was denied

[@stanleytate]

I'm sorry to hear that you're having issues. If you're certain you've taken the steps necessary to get into the SAVE Plan, try working with the StudentAid Ombudsman. You can file a complaint with them online at StudentAid.gov.

[@lindachardon1389]

PLEASE HELP. I already consolidated all my parent plus loans like I was advised, now I cant qualify for the double loop hole. Am I already screwed or is there something I can do?????

[@stanleytate]

You can look to borrow another federal student loan.

[@teresab556]

To do the initial consolidation, do I use one paper application or do I need two paper applications? One for each consolidation? Thank you!

[@stanleytate]

You can do it either way.

[@tatianawilson9768]

Does this work for regular student loans as well or just for PPL loans?

[@stanleytate]

Just Parent PLUS Loans.

[@ChristianG88]

What if I sent my only two parent plus loans to one servicer and now they are consolidated. Is there anything else I can do to qualify for SAVE still? Doesn’t seem like I can do double loop hole. Would you suggest ICR is the next best option?

[@stanleytate]

ICR may be the next best option to get a lower payment. But depending on your income, when you retire, etc. you might explore using your forbearance time, making payments every 3 months or so, etc. Everything really depends on your facts and options.

[@keithm.9726]

I completed the double consolidation process and Save is still not available for me. Only income based repayment, which hasn’t reduced my payment at all

[@stanleytate]

You have to submit a paper IDR application to get SAVE.

[@nassimagahrules]

the paper IDR application has to be done vs the online application? or can i choose the income based repayment and then change to SAVE? @@stanleytate

[@rickmooney5931]

Mohela still won't approve.. even after I called what's next can you help if I hire you?

[@naylor2000]

I currently have my plus loans on a hardship hold til January 2025. Would like to do this before deadline. Can you inform me what would be your fee to assist with this?

[@stanleytate]

You would start by booking a 1:1 consult so we can figure out what needs to be done. You can book that session here: www.tateesq.com/book-a-call

[@naylor2000]

Thank you

[@tinaebenstein6002]

Can I use the double consolidation loophole if I have one parent plus loan, one direct consolidation unsubsidized, and one direct consolidation subsidized loan with Nelnet?

[@stanleytate]

Yes, that can work.

[@tinaebenstein6002]

@@stanleytate Would I still do a paper copy first with another lender? Can I still apply for PSLF? If I had $200 I'd book a consult. I didn't even know this was a thing until yesterday and I accidently seen your site.

[@malaijordan3387]

Does this loophole work if I want to consolidate student loan type DLSCNS and DLUCNS?

[@stanleytate]

Likely not. Hard to say 100% because I'm not looking at your loans. But they likely have the same account number. If so, then no.

[@Terry-vy5ic]

I have 3 PLUS loans under Nelnet. Which servicer should I send (two and one) to end up with MOHELA?

[@stanleytate]

There are only two serviced that handle consolidations: Nelnet and Aidvantage. So you don’t have choices.

[@denisedoherty4909]

@@stanleytate So if Mohela is servicing your loan you are out of luck???

[@MGot07]

@keithm.9726 hello Keith it was 4 moth ago you were denied into the SAVE program. wondering what happened since then? i'm in the same boat-denied

[@samanthachoi4480]

I am trying to fill out the forms and currently all my parent plus loans are through mohela. In the section for “loans I want to consolidate” do I put the loan servicer information of the new servicer I am sending to or mohela?

[@samanthachoi4480]

One more important question. Where can I find the loan account number?

[@user-ii7wg6mm8l]

what if i have three loans?

[@stanleytate]

You can still do double consolidation. We've done that for many clients.

[@Terry-vy5ic]

@@stanleytate How is this done?