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student loans and parent plus loans

guava123guava123 14 replies3 threadsRegistered User Junior Member
So I’m considering getting a parent plus loan however I also have my own student loans that I’m currently paying and they’re huge. I’m wondering what are consequences of a parent plus loan and student loans in general in case I get to retirement age and still have not been able to pay off the loans.
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Replies to: student loans and parent plus loans

  • austinmshauriaustinmshauri 8843 replies325 threadsRegistered User Senior Member
    I think the Parent Plus Loan will be taken out of your social security check if you're not making the payments.

    Doesn't your kiddo have affordable options?
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  • guava123guava123 14 replies3 threadsRegistered User Junior Member
    so you mean if i retire, they will take my social security check and garnish it or will i still be able to pay monthly from my retirement check? And dies that only apply to parent plus loans. Does it also apply to my student loans that i took for my own college payments . And my student has no affordable options, either I help or she doesn’t continue attending.
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  • jmnva06jmnva06 740 replies7 threadsRegistered User Member
    You will still be able to pay from your retirement check. If you fall behind on your payments that can garnish your social security
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  • twoinanddonetwoinanddone 22709 replies15 threadsRegistered User Senior Member
    As long as you are current, you can keep paying as you have been. Your direct student loans cannot be consolidated with your Plus loans. They will always be two separate obligations.

    If either goes into default, yes, they can garnish your SS payments. They do not forgive the loans based on your age.
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  • austinmshauriaustinmshauri 8843 replies325 threadsRegistered User Senior Member
    If you tell us your situation maybe we can help. How long has she been in college? Why is paying suddenly a problem? Some colleges will take a change in circumstances into account.
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  • guava123guava123 14 replies3 threadsRegistered User Junior Member
    edited August 16
    There is no change in the family finances but she was attending a private school that had given her a ton of scholarships and the option was very affordable. Though the school was very expensive, she was paying very little due to the school financial aid and scholarships. The school was too far and she transferred back to the state school. I could have forced her to stay there but the school was very far and i did not want the risk insisting that she stays there. The state school did not award her any money and so she owes about 25000. with her loan of 5500, the balance of 20000 has to be paid somehow hence the patent plus loan. She will be a junior. And she has a sister who is just starting so i cant afford all that.
    edited August 16
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  • austinmshauriaustinmshauri 8843 replies325 threadsRegistered User Senior Member
    Can she take a leave of absence from the private school? Maybe if she works for a year to raise the $20k she needs for her junior year it won't seem so bad.

    There aren't any schools within commuting distance? What's her major?
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  • BuckeyeMWDSGBuckeyeMWDSG 873 replies8 threadsRegistered User Member
    "i cant afford all that" - nor should you feel you have to. What were you contributing toward the other school? / What can you afford?

    If she is a junior why isn't she taking $7,500 in student loans? ($5,500 is the loan limit for freshman - did some of her credits not transfer?) Does she have a course schedule plan that will allow her to graduate in two years?

    There are loan fees (more than 4%, so you'll need to borrow $20,887 to net $20,000) and the interest rate is high (more than 7%), so it will be much more than $20,000 you'll need to pay back. It is noble that you want to contribute, but you need to know where the money to pay back the loan (and another $21,000 next year?) will come from.
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  • cptofthehousecptofthehouse 29255 replies57 threadsRegistered User Senior Member
    Are you current on your student loans? You may end up getting turned down for PLUS if you are not. Then your DD will be permitted to borrow an additional $5 k (?) or so from Direct loans if you are denied.

    You and your daughter really can’t afford this school. I think you should sit down and have a talk about this. How you owe from your student days and have the other one coming up to college years. She probably will have to find a directional state school to which she can commute or go to school part time, pay as she goes. School loans have put enough of s toll onto you.
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  • guava123guava123 14 replies3 threadsRegistered User Junior Member
    She can take a leave of absence but I doubt she would ever go back there. I will think of the commuter option but it will be a last resort.
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  • cptofthehousecptofthehouse 29255 replies57 threadsRegistered User Senior Member
    To answer your question, yes, repayment of student loans can be from garnishment of social security checks. Even being a co-signer on those loans can get your government check garnished. That’s why so many people who are not able to get any other loans are able to get student loans. The lenders know they have a good chance of getting the money back. I know an elderly man who co-signed his granddaughter ‘s loan and repayment is coming out of his social security check. She’s not able to find steady work so they went after him.

    Really, you have enough on your financial plate.
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  • austinmshauriaustinmshauri 8843 replies325 threadsRegistered User Senior Member
    Why would the commuter option be a last resort? Plenty of kids commute. What state are you in? Most state schools are very good.
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  • thumper1thumper1 74366 replies3255 threadsRegistered User Senior Member
    What parent plus loans or student Direct Loans require a co-signer

    @cptofthehouse

    The Direct loan is in the student name only and the parent plus is in the parent name.

    This OP is already in her own debt. There is no good reason for her to assume more debt...especially since she thinks there is a chance she won’t be able to repay
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  • Madison85Madison85 10316 replies408 threadsRegistered User Senior Member
    Was she homesick? You mention the school was too far away (from what?). Would it be cheaper to go to the distant school but come home for more visits?!
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  • happymomof1happymomof1 29606 replies173 threadsRegistered User Senior Member
    @guava123 - One of my dear college friends was miserable far from her home, and undecided about her major, and like your daughter decided to leave at the end of sophomore year even though she had a very good scholarship situation. She went home, worked for two years, thought carefully about what she wanted to major in, and then transferred to an affordable state U near her home. That kind of plan might work well for your daughter. She should not feel that she has to be back in college this fall, especially since the family budget can't handle the place she's currently thinking about. A semester or a year or more off to re-think the far away college and to track down affordable transfer options would make good sense.
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  • cptofthehousecptofthehouse 29255 replies57 threadsRegistered User Senior Member
    Student Direct Loan amounts can be increased by about $5k if the parent applies for PLUS and is declined.

    The student and parent can also apply for loans where the parent co-signs and both of them are in the hook if more money is needed and the parent does not qualify for PLUS.

    The only co-signing of PLUS loans is if parent does not qualify, and has to find a credit worthy guarantor to get that loan—not the student.

    There are a lot of ways to borrow money for college. It’s paying it back that’s difficult and painful for a long time. And yes, those loans all allow garnishment to get repaid and that includes the co-signers
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  • austinmshauriaustinmshauri 8843 replies325 threadsRegistered User Senior Member
    I think if you have any late payments you won't be approved for a PLUS loan. What would you do if you added $25k to you/your daughter's debt for jr year but don't qualify when she's a senior? She'll be ~$50k in debt with no degree and nowhere to borrow money to finish.
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  • guava123guava123 14 replies3 threadsRegistered User Junior Member
    I’m current on own loans. I thought about the option of her working for a while but that option may backfire , what if she gets comfortable and doesn’t want to go back? Also she will be lonely and judged. The people in my community are very judgemental. Everyone goes to college here. I don’t know any kid here who didn’t go to college. Most can afford it , others take out plus loans like its the norm and they expect it from me too. They will start asking my daughter why she dropped out and blah blah. Now I know I shouldn’t worry what others say but that’s how it is here. My loans are in good standing though and I’m sure I will qualify. My fear is the consequences of increased debt. I called the servicer and they said I can pay my loans as long as Im alive, there is no time limit.
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