The Parent PLUS Loan Shell Game

JRZMom
Fri, 28 Jan 2011 13:05:34 +0000

jmm123- the rate for Direct Student loans is 4.5%. The Parent direct loans’ rate is 7.9.%

[Direct Loans—Parent PLUS Information](http://www2.ed.gov/offices/OSFAP/DirectLoan/parent.html)

If you think that is bad, you should have seen the rates banks were charging students & parents a couple of years ago! The “shuffling” took place because the students and their parents were being ripped off unbelievably – schools were getting kickbacks from lenders to require all of their FA kids to take loans through only those banks, etc. The gov’t taking hold of the loans was actually a godsend to parents of the upcoming college classes.

The banks howled and wept–but no one is stopping them from making private loans to anyone who wants to borrow from them. What has been stopped is the forcing of students to use certain banks or other lenders. And also, the interest is now going to the govt (to be used to make more student loans), not to line the pockets of the bankers.

Paying interest is fair enough — you are using the money to go to school; it is fair to pay interest on it. My student loans were 6% and that was in the 1970s.

You can consolidate loans-- my brother has. You can also have them forgiven entirely if you are working in certain social service jobs or for certain social services employers.

“Go to the Public Service Loan Forgiveness fact sheet for more information on the terms and conditions of the program and to understand what types of public service jobs qualify.” see below

[Student Aid on the Web](http://studentaid.ed.gov/PORTALSWebApp/students/english/PSF.jsp)