Parent Plus Loan information and experiences

lvvcsf
Mon, 24 Jul 2023 15:47:19 +0000

I’m of the opinion that loans are a tool. College is not usually something that sneaks up on people but it’s very easy to not plan for how to pay for college. It’s important to understand the costs of colleges, what scholarships and grants might be available, how need based financial aid works and from there set a budget. It doesn’t have to be a fixed amount but parents need to know what they will contribute. If this requires loans then it’s best to understand how these loans work before you begin the college search process. In a perfect world this due diligence would be done first and no one would be surprised. My guess is that PPL loans would be rarely used and if used understood.

However, many parents act like their child going to college is an unexpected emergency. They don’t understand the cost of college and even if they do they are convinced that it will ultimately be covered by someone else. Only at the last minute will they realize that it will need to be financed and that is where PPL loans are their most dangerous. The kids have been accepted, financial aid isn’t nearly what people expect and it’s an emergency. Rather than admit at this point it’s unaffordable people may turn to PPLs. Little “whoever”, has been accepted to their dream college and the PPL is the easy way to finance the tens of thousands of dollars no one has.

To me the consumer who gets in trouble using PPLs is the primary one at fault. they are the ones who go into this too late and who often are willfully ignorant. Second, would be the government as they make it so easy to make devastating financial decisions and finally the schools by not encouraging families to have this discussion early and in many ways encouraging this behavior by making it sound like the costs can be relatively easy to take care of.