@vocal1046, I think you missed my point. I never said that the only full life has x components. What I said was that families rarely sit down with their kids and talk about the future impacts of a loan that MAY impact big future decisions. I never meant to imply that everyone must get married, have 2.3 kids and own a home. I only said that those items may not be an option if the long term financial implications are not discussed and considered carefully. Any kid, I don’t care what major, that graduates with a $1400 a month debt payment has fewer options for a long time.
How are the students taking out so much debt with the new student loan laws? I’ve seen this debated back and forth quite a bit and I keep thinking the new laws are supposed to prevent this debt from occurring. Am I missing something?
The parents hold the debt and as working, tax paying members of society they can choose whatever path they like.
I think you’re right. The really huge debt amounts combine student debt and debt secured by the parents (who may expect the student to pay them back).
I am also surprised when I read the amounts people mention that a student might have in loans as I thought there was a limit to the amount a student can borrow as an undergraduate. For parents, it is totally different (I know, as I am paying lots of loans).
Got it @Jkellynh17! This has been perplexing to me for awhile and I don’t consider myself ignorant.
Go to this link and scroll about half way down the page to the section called:
HOW MUCH CAN I BORROW? (this is in regard to STUDENT Loans)
https://studentaid.ed.gov/types/loans/subsidized-unsubsidized#how-much
That’s why I don’t get how an undergraduate student would have to pay $1400/month (an amount mentioned in some posts on this thread) in STUDENT loans after graduating (not counting Parent Plus Loans). Now, my older daughter’s loans are in this range but they include both undergraduate and graduate school loans and so that is different.
I didn’t see your post, @Jkellynh17 when I posted my posts above. However, I can’t imagine how a student is obligated to pay back the Parent Plus Loans. At least not legally as these are taken out by the parents and the student is not signing anything to obtain these. Whereas, as a parent, I pay Student Loans, because we took these to obtain a better interest rate, but have always intended to pay these as the parents. Obviously, there is no legal obligation there either but that is how we took them out in the first place. We also took out Parent Plus Loans but there is no possible way either personally or legally that the kids would have to pay those.
In any case, there IS a limit to how much a student can obtain in federal student loans.
I believe there are private entities that can increase the amount of student loans. And the ever ubiquitous credit cards. I personally know some folks who have paid for school with credit cards.
It’s that .3 that’s eluded so many…
I don’t think the student is legally obligated to pay back Parent Plus loans, but some may feel morally obligated. Just like I feel morally obligated to help my S with his stafford loans to the extent I can, even though it’s his name on the paperwork.
I think there are parents who expect the students to pay them back, even if they are legally the parent loans. And even if they don’t, if parents are paying big school loan payments, many will be less able to help the student with other things after graduation, will be less able to travel, retire when they want to, and ultimately, depending on circumstances, have less to leave to their offspring when they’re gone. WHAT? Have I gotten too morbid? But these are all issues that are hard for any of us to grasp when we are in the throes of turning down the dream school that is an emotional YES in April after an insane year of applications and auditions, let alone an 18-year-old who may never have paid a bill in their life. I’m sure there are some super-mature 18 year olds here (I know there are), or some of you have kids that are/were way more mature and worldly than my kids were or I was at 18. I look back at some of the decisions I made at 18 and cringe. BUT of course each family has different financial circumstances and priorities.
And PS I REALLY appreciate the people in the business who come on here and give their perspective.
Not too morbid at all @Calliene - at least for my tastes. I’m sure those of use with multiple rugrats either HAVE heard, WILL hear, or will NEVER-EVER hear from the siblings who are all uniformly thinking: “You are spending my inheritance on a THEATRE school?!!!”
^^^Hmm, that is not the experience in my own family. My MT daughter’s sister is pretty much her biggest supporter. And in fact, we spent a lot more on that D’s education because she went to grad school for four years, which the MT daughter did not do.
Likewise, Soozie. The sib is behind the kid 100% or more!
Students can with a co signer obtain plus loans. Perhaps that is how some leave school with large debt.
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@CTownMom Are you sure a student can be the co-signer of their Parents Plus Loans?
On this link, it says:
Same here:
@CTownMom Perhaps I read your post wrong? Did you mean that students can obtain a Plus Loan with a co-signer (not that students can co-sign a Parent Plus Loan)?
If so, I don’t think that is correct either. Parents of dependent undergraduates can obtain a Plus Loan. Graduate students can obtain a Plus Loan too.
@soozievt, you are correct about plus loans. I am not knowledgable about all the different loan types. When my older kids were in college 8-10 years ago, we knew kids who obtain educational loans with a credit worthy co signer. The only condition was the student be over eighteen. i copied this today from Sallie Mae’s website…Sallie Mae’s private student loans reward our more creditworthy customers with better interest rates and lower fees.
If you’re a student with little or no credit history, it may be difficult for you to qualify for a loan without a creditworthy cosigner. That’s particularly true now, as lenders tighten their credit criteria.
But there’s good news: Having a creditworthy cosigner has many benefits, including the possibility of substantial savings on your total loan cost.
That is different, however, to have a parent co-sign a student’s loan.
My kids’ loans with Sallie Mae have since been taken over by Navient. So, I’m not clear on the Sallie Mae stuff.
Anyway, my point was that I can’t see how a student is obligated to pay any Parent Plus Loans and their names would not be on those loans in terms of being a borrower or co-signer.
And my earlier point (along with some other posters) is that there is a limit on how much an undergraduate student can borrow in federal student loans.
Also, I was commenting earlier that the amount we were willing to borrow for the kids’ educations would have been the same no matter where they went and we did not base it on the name of their chosen school.