Stuck with Parent Plus Loan and want to Refinance.

I would just keep the details to a minimum but I feel to fully understand my situation I have to mention everything. So sorry for the long post but not sorry. I appreciate everyone who takes time to weigh in their thoughts on this scenario.

In 2010, my mother took out a parent plus loan right after I graduated high school for me to attend SVA, School of Visual Arts, a private college in NYC. I was 18 years old at the time and I had no clue what I was doing with my mother’s money but she was so eager to help me that she took out a parent plus loan. Not to make a long story but I think I should include that I became terribly mentally ill after my first year at SVA, could not continue courses, and had to withdraw after my second year of college because my diagnosis, schizoaffective disorder, was causing too much of a hassle for me. My mother also maxed out her credit after the second year so we could no longer afford to finish my degree. I was completely uncertain of what I wanted to do in school, ended up changing my major for my second year at SVA, then had to stay out of school between year 2012 and 2017 because of the debt I owed SVA and my health.

Now the loan has advanced to my mother’s wage being garnished. I wish I could help her but I am currently unemployed receiving social security disability. The loan is for a whopping $88,000 and they are going to take $130 out of her check.
While 130 is not much, I still wish I could help her. This is all a complete mess and I wish I had taken more time to think about what I want to do before putting my mother into such huge debt. I can easily pay her 130 2x a month but we’d prefer to have the loan off of her credit completely.

I resumed my education last year at the CUNY NYC College of technology, where I majored in communication design and took time to figure out what I want to do with my career. I managed pass all of my classes with straight As and built up a portfolio that I used to get accepted to the Fashion Institute of Technology. I am slated to graduate from FIT in 2020 with a mere AAS degree. Then, I will take advantage of the schools 2+2 degree program and get my Bachelors in computer animation. I will be done with college in year 2022.

TL;DR
Almost every lender I find requires me to be employed with at least an AAS or a BA. Is there any option for me given my disabled status that my mother and I can refinance this loan in my name? Or any way she can refinance the loan or consolidate? One option is to get off of disability and find a job. But that is risky given how everything is working so fine for me. I could easily get a job and lose it and have no way to support myself in school. I have signed up for a federal work study at FIT btw. But the added SSA cushion is not something I think I should throw away now. Might not even be possible unless a doctor tells me I am eligible and healthy enough to get off of disability.

Thank you.

To the best of my knowledge, a Parent Plus Loan is not transferable. The only way I know that you could take this on would be for you to secure a private loan and then pay off the PPL for Mom - This is not a likely scenario as it appears you are still in school and I doubt you would be able to secure the type of funds you would need to pay this off.

I don’t know anything about PPL’s in default but it might be worth your efforts to sit down with Mom and contact the lender to see if there are some arrangements that could be made. Most loans go into deferment ( a hold pattern) when the student is in college but since this is now a garnishment, I am not sure of the options. Its certainly worth the time and effort to resolve.

Your mom can’t just turn that Plus loan over to you.

Your mom has significant debt, so it’s unlikely she would qualify as a cosigner for you to get a loan in the amount of $88,000.

It sounds like no one made any payments on those loans, right?

Since these are not in your name, your disability status isn’t going to help in repaying the Plus Loan.

The government will not rewrite the PLUS loan to another borrower. The only way to do it is to get a private lender to rewrite it (SOFI) but it is unlikely to happen since you don’t have good credit established.

I doubt that $130 x 2 is paying the interest on an $88k debt. It is likely your mother’s debt is growing every month. The only way to change this is to work with the collector. They might be willing to restructure the debt with a direct payment rather than a garnishment. The garnishment also has fees involved, and those are part of the $130 payment too.

Ok Mom is going to talk to the lender again. One question though, do you think a lawyer will be able to help us to make sure that the collector can restructure the debt? My mom has tried talking to consumer affairs becasue the collectors are have changed from their agreement to allow her to make a payment plan straight to garnishment. She supplied them with paystubs and everything and they are still garnishing. Consumer affairs was not able to help her either. At this point, do you think this issue would be something a lawyer could help us with? Because it is something she is considering.

Who is going to pay the lawyer?

Why is that your concern?

A lawyer is going to cost you money that maybe you don’t really have…unless you can find someone who does pro bono services.

I’m not really positive a lawyer is the person who can help you with this. Your mom needs some help structuring the payments she owes…there are folks who specialize in this.

Ok thank you I will tell her that. Im aware that a lawyer is expensive. Just wanted to lay everything on the table. Mom was the one who suggested the lawyer even though shes reluctant to go down that route.

I think a lawyer might help, but not just any lawyer. There are a few that specialize in student loans (there is one in Boston) and also are active in trying to get legislation passed.

Because you said the consumer advocate wasn’t able to help, you’re going to have a tough time. A state or federal representative may take on your case. You are dealing with a federal agency (Dept of Ed) that has turned this over to a private collector. The private collector has no reason to give you a break. You have to find someone who has some pull to get the collector to work with you. The average lawyer is not that someone.