<p>Himom, you are mistaken – a parent PLUS loan is discharged by the death of the student, as well as by death or permanent disability of the parent borrowers. Obviously no one wants anyone to perish, however. </p>
<p>I’d note that it is also possible, although very difficult, for the PLUS loan to be discharged in bankruptcy. Not an easy process at all, but it can be done with a showing of undue hardship. Not a good option, but obviously preferable to anything involving fatalities.</p>
<p>Parent PLUS loans don’t have any asset or income test for the parents – all they need to do is demonstrate good credit. A person with a $40,000 income who always pays their bills on time may have excellent credit – and with a PLUS loan the parents are allowed to borrow up to the full COA for the school. </p>
<p>There some ways the parents can work with the lender to stretch out their payments – I provided a link to the site that explains the options above. So there are ways that the burden on the parents can be reduced somewhat.</p>
<p>I do feel that janefield is between a rock and hard place. I understand why her parents want her to complete the degree, but I also feel that if indeed they cannot pay back the loans they have already taken, it would be unconscionable for the daughter to allow them to take on more debt under these circumstances-- and that might be true even if she wanted to continue the program. I can understand that at age 17 she probably did not understand all the ramifications of what her parents were doing by taking on so much debt themselves – but now that she is old enough to see what is happening, then I can see why she would be reluctant to continue, and that in itself may be coloring her perspective about the value of her degree. That’s why I suggested meeting with a financial counselor – someone who can look over the parents finances and loans, and help them come to terms with their current situation and avoid digging themselves in any deeper. </p>