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Freeing Yourself From Parent PLUS Loans Is A Challenge, But It Can Be Done


Many parents dream of amassing a college fund for their children, one that will enable them to graduate from college debt-free, but this is much harder than it sounds.  As wages stagnate while the price of tuition, dorms, and textbooks rises sky high, parents are less and less able to afford college, while employers increasingly demand bachelor’s degrees for all but the lowest paying jobs.  Meanwhile, the federal government has been all too willing to issue Parent PLUS loans to almost everyone who applied for them.  With Parent PLUS loans, the parents of college students can borrow as much money as the universities where their children are enrolled charge for tuition and other education-related expenses, whether or not their income enables them to repay them.  A Parent PLUS loan can feel like a dark cloud hanging over your future, but a Miami debt lawyer can help you look at the big picture about your finances.

The Most Depressing Debt

Student loans can follow you around for the rest of your life even if you have barely reached adulthood when you borrow them.  This is even more the case with Parent PLUS loans, where the borrowers are in their 40s or older when they take out the loans.  Since income-contingent repayment (ICR) plans require you to make payments for 25 years before the loan is discharged, that means that many borrowers are already retired by the time they can stop paying the loans.  Even worse, it is not possible to discharge Parent PLUS loans, or any kind of federally backed student loans, in bankruptcy.  If anything reminds you that nothing is certain except death and taxes, it is Parent PLUS loans.

If Not Income-Contingent Repayment, Then What?

Enrolling in an income-contingent repayment program that will last a quarter of a century hardly comes as a relief to anyone old enough to be a grandparent.  Most of the other options are not easy to attain and are open only to some borrowers.  For example, you can apply to get the loan discharged early if you have a disability or if the university where you child studied has closed, as well as if you work in a public service field.  Of course, not everyone eligible for these loan forgiveness programs gets their loans forgiven; the Public Service Loan Forgiveness program, for example, has abysmally low acceptance rates.

In some cases, the best choice is to refinance the loan in your child’s name. This is an especially wise choice if your child is gainfully employed and you are nearing retirement age.  If you can’t stand the idea of putting your child in debt, then continuing to make payments on the ICR program may be the best option.

Toward a Debt-Free Retirement

Parent PLUS loans do not go away easily, but it is possible to make them go away.  Even if you are in your 60s, it is never too late to tackle your debt program.  Contact Nowack & Olson, PLLC for help today.



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