‘Please help!’ It seems like I have been paying my child’s student loan forever. How much longer must I pay it off?

Dear Quentin,

It seems like I have been paying my Parent PLUS Loan forever. Someone told me that when my husband passed away, even though we were divorced at the time, I wouldn’t have to keep paying the loan. Please help!

Left Holding the Loan

Dear Left,

If you signed your name on the loan, you owe the money. As you have found out, Parent PLUS loans are also easier to sign up for than some other student loans — and the motivation to help your child is hard to ignore — but they are not so easy to get out of.

Parent PLUS loans, a product the government offers parents to help pay for their kids’ education, come with lower protections for the borrower than other student loans. They are also often advertised by colleges next to financial-aid awards and grants.

Parent PLUS loans have, for the most part, fewer limits on how much you can borrow. Parents, like yourself, borrow in the hopes of giving your children a better future and helping them increase their earnings, but you are on the hook for the repayments.

The borrower must demonstrate creditworthiness, but this does not assess the borrower’s ability to pay off the loan. The number of these loans have increased in recent years, and borrowers now have an average outstanding loan debt of close to $29,000.

There are ways to seek forgiveness for these loans.

There are ways to seek forgiveness for these loans: Pursue income-contingent repayment forgiveness, qualify for Public Service Loan Forgiveness or for disability discharge, or refinance privately in your child’s name. Otherwise, they only discharge due to the death of the parent or the student.

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

If you’re in danger of missing payments or defaulting, you could consider an income-driven repayment plan that ties your payments to a percentage of your income; sign up again for automatic payments to ensure you don’t fall into arrears; or consider an unemployment deferment or hardship forbearance.

Another issue with Parent PLUS loans that may not present itself as so obvious in the first instance: students have a longer period of time to pay off these loans, while parents — who may have other children and a mortgage to pay — risk their retirement savings to pay these loans.

Parents, be warned. The interest rate on Parent PLUS loans is also higher than 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 higher origination fees of 4.228%.

These loans are also thought to worsen the racial wealth gap, or the disparity in household wealth between Black and white families. “The Parent PLUS loan is becoming 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 America, a public policy think tank that studies education.

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