Has anyone consolidated their PLUS with their own direct loans. I have a consolidated loan that would be costing me dearly if I wasn’t a teacher. I made horrible mistakes as a young independent student and I’m trying to get all this credit mess cleaned up. I kept deferring and taking out more then I should. I didn’t have parents to help me understand anything and neither did my husband. He kept making financial mistakes which led to me filing bankruptcy, divorce, 3 jobs, consumer debt consolidation , and a 2nd marriage. The bankruptcy is off my record, the debt is all paid, and despite my poor health and horrible work conditions I am working as a teacher so my loans will finally be forgiven in 8 more years.
Now my daughter who I guided through my own mistakes has an opportunity of a lifetime to go to Cornell. When I got remarried I told him I wanted to keep things seperately just on paper to keep my low student loan payments or for potential financial aid for my daughter. . We didn’t even have to get married because my benefits cover domestic partners. He promised me that the money we saved in taxes would more then make up for her college tuition.
Well fast forward 5 years. She’s made it into an Ivy and he doesn’t want me to sign a Plus loan or any loan for her yet she’s stuck with an EFC of 38000 because of his high income. If I had kept things seperately I only make 75000 and I have 2 children from my first marriage. Their father has continued to make poor decisions and is severely I’ll on medicaid and applying for subsistence for himself.
So my only option for her is the PLUS because her father doesn’t even qualify. However I read that I might be able to consolidate the Plus into my existing consolidated laon and keep the same payments and it could possibly all qualify for loan forgiveness.
And for those who might judge. I was severely misguided as a young student with the loans. The schools didn’t care that a 13000 loan would turn to 25000. This is the education that I want to give my kids. Pay those loans off asap. While you are you g and have the energy to work more and harder. Live cheaply as possible while your young and you only deserve the fruits of your labor when all the work is done.
So has anyone consolidated their plus. And is there any other option for my child. I do t want to just cosign a private loan for her because I feel there is jo safety net. Life has taught me there are no guarantees even if you work hard and do the right thing
You can consolidate Parent PLUS loans into Direct Loans. I have used a Consolidation Loan before (not with a Plus loan though).
The only issues I have ever heard of with that is that combining a Plus loan taken out for your dependent may affect your interest rates (they take a weighted average interest rate I believe) and the Consolidation Loan might not be eligible for some special income-driven repayment plans that you might have had (since Parent PLUS loans themselves are not eligible for some of kinds of repayment plans, this characteristic carries over to the Consolidation Loan). If you don’t have those repayment plans it should be fine.
The only other issue I would talk about is the forgiveness. Where did you learn that Parent PLUS loans taken out by teachers are forgivable? It’s been a while since I did this but I thought only certain types of loans were forgivable under that program. I could be misremembering though but I would try to find a direct source for that from the ED.
The parent can actually qualify for Income Contingent repayment for PLUS, but only if it has been consolidated with other federal loans. I believe that there aren’t any circumstances where the Parent PLUS can be forgiven, even if it has been consolidated…could be wrong on that though.
I think you’re right; I just checked and they can get the Income-Contingent Repayment (ICR) but not the slightly more generous Income-Based Repayment (IBR). It does matter though which one the parent has (if any).
Thanks all. I called fedaid today. You have to be a lawyer and read all the fine prints to figure this stuff out. That’s why I I was so straddled with my own student loans. Even if I would have known. I didn’t even know what those terms mean. Now I know and I’m trying to help my daughter avoid some of that.
I want her to work hard for her education because I think that’s the only way you learn this stuff deep down and it prevents you from spending money where you shouldn’t.
Rachel…I don’t think you are going to like this post.
You admit to making some poor financial decisions as a younger person. Please don’t do the same for your daughter…Or continue to do the same for yourself.
$38,000 of loans a year in loans is too much…even for a great school like Cornell. That is going to add $160.000 in loans to your loan bills. With incime based repayment, you pay that lower amount and, yes, after 20 years the balance will be forgiven. BUT, and its a big BUT…any remaining balance forgiven is subject to taxes. There really are no free rides.
This is a great school…but this is NOT great debt load.
Please think carefully about this.
And remember that you will need to qualify annually for the PLUS. If you don’t, your daughter will get $4000 more in direct loans…which will not cover her costs to continue to attend Cornell
It would costs 0. I told my current husband that. I would get a divorce at this point but we have 1 child together and he is already paying child support for another child. Where would I state that we live? How can we still have the same address? I am so disappointed in the whole "American " dream. My parents never went to school, I went to state school on my own, and now we have someone going to an Ivy. Sounds nice only if we could afford it.
In honest truth state school would still costs us 88000. She is going into engineering. I’d never invest money in a soft science education. That was another mistake that I made.
My husband makes good money now but it’s taken him 30 years to get to this salary. Graduates from MIT are making that about 5 years after graduating. So it’s all relative.
I’ve done a lot of research it is worth it. She’s a good kid and she will return the money as quickly as possible. It was all just so shocking to find this out.
It takes years to get them there and then in a blink if am eye you have to make a commitment.
We might do a gap year to help ease the finances for 1 year and help get the money together.
Just to let you know, I won’t have to make a hard choice. Cornell was very generous. I won’t have to take out a loan at all. I don’t know why or how, but I’ll take it. I did write an appeal letter even before we got the financial aid package because there was an error on my ex-husband’s paperwork.
He also wrote in a statement and had supporting document of his current situation.