‘Please help me!’ It seems that I have always paid off my child’s student loan. How much longer do I have to pay it back?

ByRichard C. Sloan

Apr 14, 2022
Dear Quentin,

It looks like I’ve been paying my Parent PLUS loan forever. Someone told me that when my husband died, even though we were divorced at the time, I wouldn’t have to continue paying the loan. Please help me!

Left holding the loan

Dear left,

If you signed your name on the loan, you owe the money. As you’ve discovered, Parent PLUS loans are also easier to take out than some other student loans — and the motivation to help your child is hard to ignore — but they’re not that easy to withdraw.

Parent PLUS Loans, a government product offered to parents to help pay for their children’s education, offer less protection for the borrower than other student loans. They are also often advertised by colleges alongside scholarships and financial aid grants.

Parent PLUS loans, for the most part, have fewer limits on how much you can borrow. Parents like you borrow in hopes of providing a better future for your children and helping them earn more, but you are responsible for the repayments.

The borrower must demonstrate his creditworthiness, but this does not assess his ability to repay the loan. The number of such loans has increased over the past few years, and borrowers now have an average outstanding loan debt of almost $29,000.

There are ways to seek forgiveness for these loans.

There are ways to apply for forgiveness on these loans: get income-contingent repayment forgiveness, qualify for public service loan forgiveness or disability release, or refinance privately on behalf of your child. Otherwise, they just exit due to the death of the parent or student.

You are one of millions of borrowers facing the possibility of disputed payments and even default. More than 26 million people are expected to resume student loan payments on September 1, 2022, after a pause since March 13, 2020 due to the COVID-19 pandemic.

If you are at risk of missing payments or defaulting, you might consider an income-driven repayment plan that ties your payments to a percentage of your income; re-enroll in automatic payments to ensure you are not in arrears; or consider deferral of unemployment or forbearance from hardship.

Another problem with Parent PLUS loans that may not seem so obvious at first glance: students have more time to repay these loans, while parents – who may have other children and a mortgage to pay – risk their retirement savings to repay these loans.

Parents, be warned. The interest rate of Parent PLUS loans is also higher than that of other student loans. For Direct PLUS Loans taken out after July 1, 2021 and before July 1, 2022, the interest rate is 6.28%, compared to 3.73% for new undergraduate loans taken out by students. And they also come with a higher setup fee of 4.228%.

These loans are also believed to aggravate the racial wealth gap, or disparity in household wealth between black and white families. “The Parent PLUS loan becomes predatory for Black PLUS borrowers who are more likely to be low income and low wealth, and who will likely struggle to repay,” according to New Americaa public policy think tank that studies education.

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