I thought it would be worth posting this for all the families out there who might be thinking about maxing out loans for their children to attend a “dream college” The article is in the Wall Street Journal so behind a paywall but chiefly concerns how the new administration are taking a hard look at Parent Plus and Grad Plus loans with a view to consolidating them with other forms of financial aid.
The last sentence is the most significant in my opinion. Families who are planning to take out Plus loans for all four years might find that they are scaled back or unavailable.
I’ve been a member of this forum for a LONG time. I have never been. Fan of parent loans of ANY kind for college purposes. No Plus, HELOC, consigned student loans…none of it.
My kids took the Direct Loan amounts…and that is IT.
The article is behind a paywall for me. I want to know what they’re doing to grad students. Most grad students can’t get a masters without significant grad loans.
@romanigypsyeyes
There are no firm decisions as yet according to the article, but I think people need to be prepared for a different reality in terms of financial aid and loans for the next four years at least. Here’s some of the things that were discussed at the last Republican convention.
Are you freaking kidding me?
Gee, it must be so nice of her to live in a world where everyone has the privilege to go full time. No other commitments like working for your rent or having a family.
For someone who used to head a CC, she seems completely out of touch. Although she’s a politician so no real surprise there.
@TomSrOfBoston who said the debt had to be crushing? I took out loans for grad school an am paying them off just fine.
@oldmom4896 I think all federal aid- including loans- should be banned from going to for-profit colleges. I can’t believe they’ve gotten away with it for as long as they have.
@TomSrOfBoston the whole crisis? No. For the vast, vast, VAST majority of people though the debt isn’t “crushing.” It’s horrible that we have to start out life in debt but the 100k cases you hear about are NOT from federal student loans so really irrelevant to this discussion.
Does the media overblow it? Yup absolutely.
Either way, you limit things like pell and other federal loans (the direct loan limit is pretty manageable), you’re hurting the poor and lower-middle income students the most. We’re usually always the ones who get screwed over by federal “reforms.” I just hate to see it happen yet again.
Open article access (although it is a short article)
I think PLUS loans should be limited, just like Stafford and Perkins loans are. If most students and parents are using the Plus loans responsibly, then it shouldn’t change anything for the majority. Those who did abuse the system (Martin O’Malley, I’m looking at you) will have to fine a different way to finance college or send their kids to cheaper schools. Some of us make those decisions not to borrow $50k or $100k in Plus loans on our own, but clearly others need limits put on them.
I didn’t read anything that said they would limit or reduce Pell.
I’m sure O’Malley could have found another source of money to send his kids to Georgetown and C of C, but the Plus loan was an easy way for him to finance college. Mike Pence also has high Plus loans for his kids.
Why should the taxpayers be on the hook to make it easy for people who could make other financial decisions? Borrowing Plus loans, at least for parents, is often not a case of ‘need’ but ‘want’. The students want to go to a more expensive school so want to borrow the money. Are there cheaper schools available, say in the states where these guys were Governors? Could the student do school a little cheaper by working, living in a cheaper housing choice?
My daughter is doing a semester abroad and when going over the financial aid, the person processing her through FA suggested I just take a Plus loan. My daughter knew that wasn’t going to happen. I’m glad there are limits to what she can borrow because if there weren’t, she’d borrow more (and have a much better time in Europe). She’ll be on a budget, she’ll have to make choices (Rome or Dublin, not both). Good practice for life when she’ll be deciding on a movie or dinner out, not both.
I would not have been able to put my daughter through college without taking a PLUS loan. (And it is only in hindsight that I learned that I didn’t need a PLUS loan for my son’s first year at college, given that he dropped out after 2 years and later transferred to an in-state regional public). I agree that PLUS loans aren’t the best option for borrowing, but my income doesn’t qualify for taking out a HELOC, and I didn’t want to further encumber my house anyway. I suppose I could have maxed out my credit cards, but I don’t like paying credit card interest either.
I agree that it’s a problem that PLUS allows borrowing the full cost of college, when that can now end up being around $300K – so maybe a reasonable cap would make some sense. I just used the PLUS to fill the gap between what I could pay up front and what the college wanted, and I paid off the balance of all the PLUS loans within 2 or 3 years after my younger child graduated (and I could accelerate payments once I no longer was supporting my kids).
Neither of my kids could have completed grad school with the grad school loans-- and there is is a potential future doctor in the family (son’s GF) who is in the same boat, with even bigger loans. But all 3 can comfortably handle their loan payments with their respective salaries (or anticipated salary, for the future doctor). Maybe the government could do more to directly subsidize medical students, given that we clearly need doctors as a society, but that probably isn’t in the cards.