Beware of Parent Plus Loans

jnm123
Sat, 13 Oct 2012 17:01:41 +0000

It’s not necessarily ‘every man, woman & child for himself’, but I definitely am for borrowers taking ownership of their financial responsibility, fiscally & morally, and dang it, know what they are getting into! Just because you CAN borrow up to the cost of admission does not mean you SHOULD. And this is where the correlation is to the mortgage mess lies, although that’s not what’s being discussed here.

Although they appear to be tightening up the PLUS application/approvals somewhat, it would probably be a good idea for borrowers to have to take a mandatory online course, maybe as long as what you have to go through for a traffic ticket. You must understand what this entails, rather than just plugging some numbers into a FAFSA form. But I suspect the government wants as many of these 6.9% loans out there as humanly possible–that’s a pretty sweet return for them.

PLUS loans are a vehicle for money now to pay back later. Too many forget that, and also don’t understand or don’t WANT to understand how compound interest works. Borrower beware.