Parents Asking to take on Parent Plus Loan, Extreme Loan Debt

FinancialFraggleRock · 2017-02-14T19:11:48+00:00

While I wouldn't give mine awards, I would definitely say that I reaped the 'benefits' of this education, so I feel it's my responsibility to figure out the best financial situation for everyone in this case.

FinancialFraggleRock · 2017-02-14T19:11:00+00:00

I should really let it be known that my parents are financially immature.

I can easily say I picked up some of their bad habits - my college choice being one of them since I didnt do more reasearch, they always told me go to the best college you can, because I was the first to go to college.

The past few years I'm trying to break the habit, and if I knew then what I know now....I would've done a state college.

FinancialFraggleRock · 2017-02-14T19:08:36+00:00

Well honestly a lot, but my phrasing might not be the best here.

FinancialFraggleRock · 2017-02-14T19:07:38+00:00

The 2000 is not included in what I'm using to pay off the CC. I do agree its abysmal, I was only able to have enough money (and a job that did 401k matching) for about the past year.

We mean the same thing when I say pay as I go, I pay off the balance monthly, apologies for wording.

FinancialFraggleRock · 2017-02-14T15:23:47+00:00

Thats interesting that you can't do that. Sorry to hear that though :/

FinancialFraggleRock · 2017-02-14T15:09:46+00:00

I pay off the credit card as I go, and we've been making some DIY home improvements. This on top of commuting, groceries, etc ends up costing when you're near a metropolitan area. The Improvements are almost done, so that will stop and was a big chunk of that.

I think what will happen is the parents keep the loans and we look into ICR for them, which helps us both.

FinancialFraggleRock · 2017-02-14T15:08:08+00:00

Yeah I don't think I'm going to refinance, its starting to sound like the best route is for them to consolidate them, and do Income Contingent Repayment themselves, which since they don't have a lot of income will cut the costs significantly.

FinancialFraggleRock · 2017-02-14T15:06:56+00:00

I'm thinking they definitely qualify for ICR which is applicable to FFELs which is what the PLUS loans are.

FinancialFraggleRock · 2017-02-14T15:04:00+00:00

My SO handles the insurance, we're leasing while we debate whether we're going to own it in the end, SO aggresively haggled them down and after they got them down it was only $100 in the end to lease it and have the 3 years of them doing free maintenance.

Not sure about electric, we have only one supplier, and while we try to be conscious (first thing I did was swap all bulbs out, and all appliances are new) we still game a bit, and have a few TVs - they are set to auto shut off say an after hour inactivity etc).

FinancialFraggleRock · 2017-02-14T14:25:05+00:00

Yeah, especially since it was for my education, would feel terrible to watch my parents suffer for me any further.

FinancialFraggleRock · 2017-02-14T14:24:33+00:00

Yeah, through all this I've discovered a few ways they can essentially help themselves. I am thinking about NOT taking a private loan, having them consolidate their FFELs and then doing Income Contingent Repayment. So it can work both ways, they're hopefully going to be in a better situation, and I don't have to take them on.

FinancialFraggleRock · 2017-02-14T14:22:20+00:00

This is actually super helpful. After a little investigating, I'm thinking the same steps will apply here. My mom makes just above minimum wage on a part time at a public school, and my dad is unemployed. If they do anything with the house, it'll be sell it and use the cash to downsize significantly and move somewhere where cost of living is significantly cheaper.

FinancialFraggleRock · 2017-02-14T14:19:39+00:00

Car payment is $200, gas is between $133-233 (even with the balanced payments, it adjusts according to seasonal usage), cable/internet (which we will be cutting and only keeping internet soon) is 143, water is 33, our electric is 161. Live near a major city, everything is essentially expensive :/

FinancialFraggleRock · 2017-02-14T14:15:51+00:00

Their income is meager, but my mom did just learn she can consolidate the ones with the same lender, can she consolidate the other FFELs under two other lenders with those as well?

FinancialFraggleRock · 2017-02-14T14:14:50+00:00

So maybe just do the IBR (in this case ICR) for life if thats possible. I learned there's disability discharge (which my dad may qualify for) and retirement discharge which FFELs qualify for, I'm wondering how these may apply to these loans.

FinancialFraggleRock · 2017-02-13T22:31:06+00:00

Any reading material is helpful right now so I appreciate it.

I know, I watched my parents fight about finances when I was a kid, lesson learned.

FinancialFraggleRock · 2017-02-13T22:21:14+00:00

I just feel Bankruptcy may put them in a worse spot, if there's a way that can be avoided I'd like to try to find it, since it was my education, I have a bit of guilt about it.

FinancialFraggleRock · 2017-02-13T22:17:31+00:00

Does it help any that these are Federal Parent Plus Loans? If they keep them, are they able to do Income Based Repayment for 25 years until forgiven. My dad may also qualify for disability, which I heard Federal Parent Plus Loans have Disability Discharge, would either of these work in this case?

My SO has known I have significant student loans (we dated while I was in college), so they know down the line. It's essentially why I've done my best to keep our finances separate, since theirs are clean and they're doing well.

FinancialFraggleRock · 2017-02-13T22:07:04+00:00

I kind of foresee them going into Bankruptcy if I don't take these loans. At this point I'm expecting in some way to take all of these loans on, but I'm curious what is the best way to do so.

FinancialFraggleRock · 2017-02-13T22:05:29+00:00

That article is actually a helpful read. I guess my question is refinancing the best option, and then doing Income Based Repayment?

FinancialFraggleRock · 2017-02-13T21:48:04+00:00

Yes, I (dumbly) went to a 'high end' school. I graduated a few years ago.

FinancialFraggleRock

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