What the heck is a PLUS education loan??
Originally, it meant Parent Loan to Undergraduate Student.
Whaddya know, the federal government has changed it.
Now you can get these for post-graduate classes.? Plus cost of living.
Without limit.? That is, the PLUS loan may be for any amount that covers valuation on school attendance, including room and board.
Even the N. Y. Times editorial board has figured it out, PLUS loans are a good deal for law, and also other graduate schools, not so much for college kids.
Interest rate?? 7.9%? What could go wrong?
Well, being the parent, about to catch increasing your income earning ability with whatever classes your child is taking.
Kids change their minds.? Some check out school forever.
Nick Clements points our what can go wrong in his Daily Finance column:
- The responsibility of your loan remains with the parent and may also never be transferred. Even in retirement, wages may be garnished and assets seized to recover the debt.
- It is almost impossible to possess these loans discharged in bankruptcy.
- The rates have historically been more expensive than federal loans granted to students.
- Although loans to students aren’t repayable until after graduation, loans to folks become due as soon as they are disbursed.
Here is definitely an example on one PLUS student loan that did not go well, from James Hood within the Consumer Affairs site:
The Education Department’s lawyers yesterday intervened in the case of Robert Murphy, the unemployed 65-year-old who for three years has been trying to get from under $246,500 in loans he acquired to finance college education for his three children, who will be now self-sustaining adults.
Uh, they did NOT intervene on his behalf.? The us government does NOT want him to obtain an undue hardship discharge as part of his bankruptcy case.
Education Department lawyers the “fiscal stability of the loan program” can be imperiled if large numbers of students as well as their parents were released off their debts.
Yikes!? Don’t make me laugh.? Since when is the federal government concerned with fiscal stability?? They brag about “only” spending $500 billion above they take in per year.
Did Mr. Murphy make a mistake, signing on for all this debt for his kids?
Will he be capable to repay the $246,000 in education loans?
The question is, what must be carried out about that?? Sentence him to die a pauper, or permit him to get a bankruptcy discharge?
Well, everyone know what I think.