Parents’ Dilemma with Student Debt –Parent Plus Loans

Gwen Garrison |

Millions of loving parents have signed Parent Plus Loans for their college students and now find themselves in a quandary over it.  I recently taught a student loan debt workshop for nursing students.  One of the topics we covered was Parent Plus Loans.  Although I have talked about PLUS loans many times before, this time, I immediately began to feel just as anxious about loan repayment as the students.

It hit me that the 6-month deferment for paying my PLUS loan for my son is about to end.  That means, I can choose to pay monthly installments for 10 years.  Or, if I qualify under the Income Contingent repayment play, I can choose to pay the lesser of monthly installments for 12 years or 20% of my discretionary income for up to 25 years.  At the end of 25 years, the balance is forgiven.

However if I don't keep making payments on my PLUS loan and it were to go into default, my wages could be garnished, and my Social Security income could be reduced in retirement!  As the "What ifs" of life began to dance around in my head I think of questions all of us parents might be worrying about:

  • What if business is slow for me and my income goes down?
  • What if my husband is laid off again? (A layoff was the reason we ended up with the loan to begin with!)
  • What if I become disabled for a short period of time?
  • Should I park money in my 401k, health savings account, or other strategies to keep my income low so my loan payments will remain low?
  • Or do I commit to payments under the 10-year standard payment plan and save on interest?
  • Do I make additional payments on my higher interest credit cards first instead of my Parent PLUS loan?

What about you?  Are you debating your repayment options?  Are you a parent trying to decide whether you should take out a Parent Plus loan to help fund your child's college tuition?  We certainly understand your agonizing choices.  Believe it or not, many of the Parent PLUS borrowers are nearing retirement age.

If you would like help exploring your repayment options and finding the best strategy for you and your family, set an appointment today.  Sibyl Slade and Gwen Garrison are happy to assist you.  Call or go to and set up a visit.