So I’m guaranteed approval again? How long is the approval period? I’m hearing different things, some say they don’t pull credit again once approved, you can just switch the school in the application??
No you aren’t guaranteed if your credit standing changes a LOT before you apply again (and you may not have to - call the school and ask). To get turned down, you have to have filed bankruptcy withinthe last 5 years, you have to be more than 90 days behind on a major debt (it’s something like $2500 i arrears), or you have to have defaulted on a loan to the government (another student loan, FHA mortgage, etc)
It doesn’t take long at all to process a Plus loan, maybe a week.
If we havent commtted to a school yet isn’t it simply a matter of changing to the correct school once committed May 1st. I got ahead of myself applying before we made final decision to ensure options for aid so I put one of her 3 choices on the application. @twoinanddone
There will be none of the 3 changes in credit status you mentioned above. My family’s first college student and I wasn’t aware of the process. Didn’t realize we had to wait until committed to a school before applying for parent plus loan.
“Lending program for parents of undergraduates has expanded beyond its intended use, leaving many borrowers with debts they struggle to repay, report finds. Co-authors argue Congress should cap borrowing under the Parent PLUS program.”
https://www.insidehighered.com/news/2019/04/16/report-recommends-congress-cap-borrowing-parents-college-students
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Any loan will have to be given away. Only you will need to give more than they took. I have a mortgage. He takes a lot out of the family budget.
A friend who has been battling cancer for 2-3 years posted on her facebook page 3 milestones: That she had her last chemo a year ago, that she got her first haircut in a year… and… at age 66, she finally paid off one of her kids’ parent plus loans. She has another loan she is still paying off. She is a successful professional, but stuff happens. Please, be careful.
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PLUS loans are structured to be paid off over the course of 10 years – so if a parent stuck to the original payment schedule, and the parent was age 56 during their child’s senior year – then they could reasonably expect that the loan would be paid off when they are age 66. It’s not in and of itself an indication of any problem. Of course, in the case of your friend, the intervening cancer treatment might have been a factor in her ability to make payments – but then again, PLUS loans have options for forbearance that make them somewhat less risky than other loans , even though it may have the impact of extending the life of the loan. (Better to fall behind on the PLUS loan and put it in forbearance than to fall behind on the mortgage and lose one’s house).
The problem isn’t with the loan – the problem is when people borrow more than they can comfortably pay.
I was in my mid 50’s when my daughter started college, so yes, like other parents, I signed on to a debt that would extend to my mid 60’s. (I happened to accelerate payments and pay it off early after my kid graduated – but that’s another story).
Obviously parents should factor whatever PLUS debt they take on into their retirement planning.
PLUS loans can help fill a gap. But families who have not been able to save much at all for college need to seriously consider whether they will have the means to pay it back. They are on the hook, not the students.
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In Pennsylvania there is also the PA Forward loan program.
It offers undergraduate and graduate student loans, and parent loans.
It might provide a lower interest rate than Parent Plus loan, and I believe there are no origination fees.
that was the great article related to the load parent loan plus .Well its always hard to manage college funds for your kids as iam managing through webdevelpment and affilite programs.
Update, Texas schools to remain closed but Texas to start staggered reopening of businesses and stores April 27
Some of the remarks on this thread smack of privilege. The kid who remarked on the air in NYC and people dump on the mom? Take a look at your own kids. Do you want to give them all you can? Most parents do. Many cannot just write the check for a school with more resources but want deeply to provide their kids with those resources. I agree about the loans. The attitudes of some of you: not so much. Are your remarks coming from an experience that is similar to the single mom making $50K, or are you offering advice that you are not taking yourself, since you have more money? I would rather discuss how to level the playing field more so that yes, more kids get to breathe the nice air. Enough with the sneering ‘snowflake’ remarks.
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@writestuff54 kudos to you, my friend, and all the best to your daughter.
helpful
I’ve been thinking about this topic a lot recently. One of our kids just graduated from a state university and has had to put his job search on hold. We had the option of an elite private but would have had to fill in the gap with $20k/year in PLUS loans ($80k total plus interest) because I had only recently returned to the workforce. DS decided to commute to the state school because the program was better and no loans would be required.
I was thinking about this when the unemployment numbers started to skyrocket this spring. My company isn’t laying off yet, but I’m one of the newest hires. If we were over $80k in debt I’d be pretty worried right now and our son would be feeling a lot of anxiety and guilt. I felt sad about not being able to provide him with the on campus experience, but he is so happy not to have debt hanging over our heads. He isn’t stressing about the job search, which is a real gift. But I worry for the families who may have made other decisions 4 years ago.
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this is a sobering quote from the article. I love my kids but I still need to retire someday. Really makes me wish that there were conservatory programs out there that were affordable for all.
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A private loan like SallieMae doesn’t seem bad, just looked at the website, tell me what I am missing?
Have you run their simulator? I recall running it years ago for DC1, to help them see what the desired path would look like after graduation if loams were required. We did have money for in state. It helped DC1 to see what monthly income would be required, and what the monthly payments would be. We talked about what other expenses might be. And other things that they might like to do at that time (travel, eat out, entertainment, etc.). We did this earlier in the path, partially in the hope of motivating them to focus on test prep that could have helped with merit.
They did end up at a college where they found their tribe and in a wonderful program that worked really well for the chosen path. And we all graduated debt free.
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I agree and would love to hear some thoughts too 