So I actually don’t need the parent loan money since I already have enough to cover my tuition costs, and even a bit leftover for textbooks/school supplies, and groceries.
However, my mom wants me to take out about $6000 of the parent loan money available for something or other, and I didn’t think too big on it since it seemed like she really needed it. But since she’s using it for non-educational related purposes, my friend told me that it could get her into some legal trouble if she did that.
Now I’m very much worried. I can’t find any information on that, but is this true? Should she take out the parent loan money for herself?
Oh, didn’t see the link, sorry. She doesn’t really listen to me, but I’ll talk to her about it. Hopefully she’ll read it and that’ll convince her not to then. Thank you for the information.
Please don’t get in the habit of helping your mom borrow money. As Calicash points out, a Parent Plus loan wouldn’t be yours, it would be your mom’s, but what would you do if she expected you to help repay it? Six thousand may not seem like much, but suppose she needs money next year and the year after that? Four years from now she and/or you could be looking at $24k in debt. If she can’t qualify for a credit card or traditional loan, she may not qualify for it anyway, but you don’t want to start your adult life with debt.
How are all your other costs covered? The parent plus loan would only be for the COA less all forms of scholarships and aid. She might not be eligible for a Plus loan if everything is covered.
My other costs are covered through scholarship/grant money and subsidized student loan.
I’m really very easily guilt-tripped and she kept telling me how her friends’ children gave them the loan money so why can’t I. And I did question it the first time she asked for the money but then she looked like she was going to cry and I just feel like the crappiest daughter in the world right now. This is stressing me out too, because I would like to help, but I really can’t on this one (sorry mom).
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what would you do if she expected you to help repay it?
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She can hope or want this student to help repay it, but there’s no legal obligation there. No one will come after the student. The student can simply remind the mom that it would be her loan alone, and the student wont pay it back because it’s not the student’s loan or obligation.
The mom is likely wanting to do this since the interest rate is much lower than a credit card…much lower.
There is nothing really illegal about it, although it’s distasteful. Part of COA is “personal expenses” (which can include virtually anything from car expenses, debts, to travel, to clothes, etc), so there’s no rule that the money has to go directly to education. Besides, there is no entity that is checking how the money is spent.
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How are all your other costs covered? The parent plus loan would only be for the COA less all forms of scholarships and aid. She might not be eligible for a Plus loan if everything is covered.
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While this is true, the student may mean that direct costs are covered with a bit extra. Likely there is still uncovered COA, since that includes books, travel, and personal expenses. That said, if the mom thinks she’s going to borrow $10k+, that’s probably not possible since there probably isn’t that much uncovered COA.
The mom says that she wants to take out the $6k that is in the FA pkg. We may not like it, but she can do it.
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Why not just use a credit card?
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Likely because a CC will charge 18-22% interest, which Plus is charging about 10% or less.
I suspect that the mom wants to pay off existing credit cards, or has some other major expense/purchase in mind.
Because it would be a loan in her name, with her signature, and does not involve you either legally or ethically, I’ll stand out here and say “its none of your business”. She doesn’t need your permission or any conversation about it at all. That said, do I think she should do it? No. If she can’t get a credit card at less than 10%, she probably shouldn’t be borrowing money from anyone for anything.
My concern for this student is that the mom would phrase the loan and repayment as part of the child’s responsibility. If the mom is guilting her now to be involved in borrowing (whether she needs her involved or not), I wouldn’t be surprised to hear in a few years that “all the other kids” are repaying the loans so why won’t she?
I wouldn’t recommend starting your adult life caving to guilt trips of your mother’s. It won’t end until/unless you put a stop to it.
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My concern for this student is that the mom would phrase the loan and repayment as part of the child’s responsibility. If the mom is guilting her now to be involved in borrowing (whether she needs her involved or not), I wouldn’t be surprised to hear in a few years that “all the other kids” are repaying the loans so why won’t she?
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While that is a concern, the student can be proactive and have a discussion (best put in writing and signed/dated with a witness present) that the loan would solely be the mom’s responsibility to pay back since it’s her loan and she is accepting/using the money.
Absolutely not necessary to have a signed, dated, and witnessed letter. It would have no legal value. The Plus loan is never the responsibility of the student. Mother can get mad about it, but legally it is not the student’s obligation.
If u pour a glass of water into a swimming pool, it just goes into one collective reservoir of water.
Money is fungible in the same way.
If you mother takes out a parent loan, as long as she’s paying at least that same amount to the school, what difference does it make? Her bank account is just a swimming pool.
@twoinanddone I probably should have been more clear.
The signed dated letter was not for legal reasons…not at all. The parent is the only one legally responsible. The signed letter would be to document TO THE MOM in case later on she began harping at the DD that she promised to help pay.
Fast forward 5 years from now and mom begins nagging and nagging the DD to help pay for those loans, even claiming that the loans were for her schooling so she’s “morally” responsible, even tho not legally responsible. The DD produces the signed dated letter where mom accepted full responsibility for the loan, and there’s a mention that the loan was not for child’s education. At a minimum, the child will be able to repeatedly refer to the letter rather than have the mom “lie” and claim something else. Again, it’s not for legal purposes.
Until you’ve ever dealt with some poor-memory folks, you may not think such things are helpful.
@mom2collegekids is absolutely right. The letter would be reinforcement for OP so she can let go of the guilt she may otherwise feel for not handing over money just because her mom demands it. It wouldn’t be legally enforceable and I doubt it will mean anything to the mom either.
I just think it’s something to have on hand for the future when the mom may “twist” the story into, “I borrowed the money for YOU, don’t you remember?” Then the D could produce the evidence that no, the money was borrowed for “mom’s use”.
Seriously, these kinds of things happen… People with “money issues” sometimes have a way of twisting the truth to get others to help them out. I’ve seen it. Sometimes it’s an honest mistake, sometimes it’s not. It’s best to just have a paper trail.
Even my own honest son “forgot” that I paid him back when he paid for his med school apps. My purse wasn’t near me when it came time to submit so he paid. He used his debit card, and then the next morning I moved money from my acct to his. Later, we were at a restaurant and he made some comment about how he paid for those apps. I whipped out my ipad and showed him that I moved the money from my acct to his acct the next morning. Paper trail.
My housekeeper sometimes asks to get “paid in advance” because of some unexpected expense. then she works that off a bit a time. Each time she works, I pay her about 3/4 and put 1/4 towards the “debt.” I keep track by texting her each time she works some off. paper trail.
