Sorry…bad plan all around.
Too much loan debt for undergrad school.
The nearest any college is over an hour away?
Any chance this kid might qualify for merit aid at a different SUNY campus?
No, I believe I read that if the parents file a joint tax return, the 20% is figured on both even if only one borrowed the money. If I’m wrong, then it would be the parent who borrowed the money, not the parent with the lower income. Taxes on the charge off might not be less than the original amount borrowed. If the parents borrowed $200k and paid back very little, in 20 years that amount charged off could be huge, and it could catapult them into the highest income bracket. Of course, they just won’t pay that tax liability either.
I don’t agree that this borrowing without limits and paying reduced payments is fair. I don’t believe the guy from Mass who borrowed year after year for child after child and just had $300k+ charged off in bankruptcy is fair. I don’t think Martin O’Malley should have been allowed to borrow $350k for his daughters to go to private/OOS schools when he was the governor and they should have been proud to go to a state school. When I’m King, I’m changing all of that.
If it’s a big charge-off, that low income parent will no longer be low income, and will get a hefty tax bill and likely very little ability to pay it.
Do SUNY’s offer much in merit aid? My guess is this student isn’t an A student.
Seems like there is a lot to understand about the Parent Plus Loans. @kelsmom has a very good grip on it and has done a nice synopsis.