Burden of PLUS Loans Continues to Grow on Parents, Says American Financial Benefits Center
EMERYVILLE, Calif., July 19, 2018 (Newswire.com) - While student loan debt for students has remained relatively flat since 2012, student loan debt for parents is up nearly 20 percent in that time period. Students graduating in 2016 left college with $29,669 in debt, about $285 more than 2012 graduates. But for families that participated in the PLUS program, parents borrowed $32,596 in 2016, an increase of $5,244. There are many challenges for parents in this predicament, the main ones being that they don’t see an earnings boost from having a degree and don’t have as much time to pay off the debt. American Financial Benefits Center (AFBC), a document preparation company that helps its clients apply for federal income-driven repayment plans (IDRs), reminds parents that taking on debt to pay for a child’s education may have even more dire consequences than if the child took on that debt.
“It is extremely noble for parents to take on student loan debt to help their children get the advantage of a college degree,” said Sara Molina, manager at AFBC. “But our clients know the challenges of accumulating large amounts of debt in the hope of future earnings. We urge our clients to look very carefully at all options for their children before taking out loans for them.”
Parents, unlike students, don’t get an economic benefit from the degree they’ve invested in. If they are unable to pay out of current savings or income, their circumstances are unlikely to change. Therefore, paying off loans in addition to living expenses will probably prove challenging.
It is extremely noble for parents to take on student loan debt to help their children get the advantage of a college degree.
Parents can borrow through the federal government for their child’s education, but PLUS loans offer fewer protections than federal student loans. And since parents have less time to earn income in their lifetime, there’s a much greater risk that parents will be heading into retirement with tens of thousands of dollars in debt.
“Whether parents borrowing is serving as pressure relief or the parents are simply wanting to help their children beyond what they have been able to save, we are very concerned with this development,” said Molina. “As our clients know, our first priority is to help them navigate the complex federal system of IDRs. We ask parents, despite their good intentions, to be very cautious before going into further debt.”
About American Financial Benefits Center
American Financial Benefits Center is a document preparation company that helps clients apply for federal student loan repayment plans that fit their personal financial and student loan situation. Through its strict customer service guidelines, the company strives for the highest levels of honesty and integrity.
Each AFBC telephone representative has received the Certified Student Loan Professional certification through the International Association of Professional Debt Arbitrators (IAPDA).
To learn more about American Financial Benefits Center, please contact:
American Financial Benefits Center
1900 Powell Street #600
Emeryville, CA 94608
Source: American Financial Benefits Center